Sec. 2 (50 U.S.C. app. ï¿½ 502) . The purpose of the Act is to provide for,strengthen, andexpedite the national defense through protection to servicemembers, to enable them to "devote theirentire energy to the defense needs of the Nation." The SCRA protects servicemembers bytemporarily suspending certain judicial and administrative proceedings and transactions that mayadversely affect their civil rights during their military service. Sec. 101 (50 U.S.C. app. ï¿½ 511). This section supplies definitions for terms that are used throughout the Act. For the purposes of the SCRA, the following definitions apply: 'Servicemember'. Persons covered by the SCRA include members of the "uniformed services" found in 10 U.S.C. ï¿½ 101(a)(5), which includes the Army, Navy, Air Force, Marine Corps, Coast Guard, and thecommissioned corps of the National Oceanic and Atmospheric Administration and the Public HealthService. 'Military Service'. The Act defines "military service" to include "active duty" as defined in 10 U.S.C. ï¿½ 101(d)(1), National Guard service as service under a call to active service authorized by the President or theSecretary of Defense for a period more than 30 consecutive days under 32 U.S.C. ï¿½ 502(f) (7) forpurposes of responding to a national emergency declared by the President and supported by Federalfunds, for officers of the Public Health Service or the National Oceanic and AtmosphericAdministration, "active service" (not further defined), and any period during which a servicememberis absent from duty on account of sickness, wounds, leave, or other lawful case. "Active duty" forarmed services is defined in 10 U.S.C. 101(d)(1) as "full-time duty in the active military service ofthe United States ... [including] full-time training duty, annual training duty, and attendance, whilein the active military service, at a school designated as a service school by law or by the Secretaryof the military department concerned." "Active military service" is not further defined in section 101of title 10, U.S. Code, although "active service" is given the meaning "service on active duty orfull-time National Guard duty," in ï¿½ 101(d)(3). Under the prior law the definition of "military service" included language referring to "periods of training or education under the supervision of the United States preliminary to induction intomilitary service." Under the new law, persons on active duty and attending a service school arecovered, while persons attending training prior to entering active duty, such as officer candidates,may not be covered. It is unclear, for example, whether "active military service" under 10 U.S.C.ï¿½ 101(d) covers training as a member of the Reserve Officer Training Corps (8) or attendance at amilitary academy. (9) 'Period of military service'. A servicemember's "period of military service" begins when he or she enters military service and ends on the date of release from military service or upon death during military service. This newmeaning differs from the previous meaning only in the use of the word "release" rather than"discharge" from military service. In military terminology, a "discharge" can mean a completeseverance from all military status with respect to enlisted personnel, while "release from active duty"means termination of active-duty status and transfer or reversion to reserve status. (10) The phrase isused in the SCRA to determine the length of the availability of certain benefits. The SCRA also usesthe phrase "termination or release from military service" in some provisions, but does not providea definition for "termination." 'Dependent'. The Act defines "dependent" as a servicemember's spouse or child (as defined for purposes of veterans' benefits, in 38 U.S.C. ï¿½ 101 (11) ), or anotherindividual for whom the servicememberprovided more than one half of the support in the 180 days prior to an application for relief underthe Act. This language appears to codify courts' treatment of the term "dependent" as relating tofinancial dependency rather than strict familial relationships, (12) although the formula for determiningwhat portion of support is required appears to be new. (13) 'Court'. Courts obligated to honor the protections of SCRA include any federal or State court or administrative agency, whether or not a court or administrative agency of record. This definition expands the definition of "court" expressly to include administrative agencies of record. 'State'. The Act defines "state" as a commonwealth, territory, or possession of the United States and the District of Columbia. 'Secretary Concerned'. The Act defines "Secretary concerned" with respect to a member of the armed forces as having the meaning in 10 U.S.C. ï¿½ 101(a)(9) (14) ; withrespect to commissioned officers of the Public HealthService, the Secretary of Health and Human Services; and with respect to commissioned officers ofthe National Oceanic and Atmospheric Administration, the Secretary of Commerce. 'Motor Vehicle'. The Act defines "motor vehicle" as a vehicle driven or drawn by mechanical power and manufactured primarily for use on public streets, roads and highways, but does not include a vehicleoperated only on a rail line (as defined in 49 U.S.C. ï¿½ 30102(a)(6)). Sec. 102 (50 U.S.C. app. ï¿½ 512). The SCRA applies everywhere in the United States, includingthe District of Columbia, and in any territory "subject to the jurisdiction of" the United States. Itapplies to any civil judicial or administrative proceeding in any court or agency in any jurisdictionsubject to the Act. However, it does not apply to criminal proceedings. Protection of persons secondarily liable. Sec. 103(a-b) (50 U.S.C. app. ï¿½ 513(a-b)). These subsections extend some protection to persons who share a debt with one or more covered servicemembers or have secondary liability asa "surety, guarantor, endorser, accommodation maker, co-maker, or other person who is or may beprimarily or secondarily subject to the obligation or liability" at issue. If the SCRA provisions areinvoked as to the servicemember, the court has discretion to grant a stay, postponement, orsuspension of the proceedings against such persons, or to set aside or vacate a judgment. Whethera court grants such relief appears to be influenced by equitable considerations, including whether theservicemember is able to appear in court, whether the servicemember's presence is necessary for thedefense, and whether an unjust forfeiture could otherwise result. If the servicemember is onlynominally a party to the suit, as in cases of negligence where the insurance company might beconsidered the "true defendant," the modern trend is to deny a stay. (15) The right to open a defaultjudgment taken against a person in the military service is reserved to that person only and is notavailable to a judgment co-debtor. The Act added the term "co-maker" (16) to the list of persons who may be entitled to a stay in anaction which has been stayed with respect to a servicemember. This effectively codifies courts'interpretations of the previous version of the SCRA. (17) However, it does not explicitly adopt the testsome courts have used to determine whether a stay is appropriate. Criminal bail bond sureties. Sec. 103(c) (50 U.S.C. app. ï¿½ 513(3)). This subsection protects bail bondsmen who are unableto procure the appearance of the principal due to that person's active duty service. In such a case,the court hearing the charge may not enforce the bond during the period of military service of theaccused, and has the discretion to return the bail in its entirety to the bail bondsman in the interestof equity and justice. While some courts have interpreted this subsection to allow for no discretion, (18) others have required sureties to make a further showing that the appearance of the principal was infact prevented due to military service and that the surety made an effort to secure the appearance ofthe principal in court. (19) Waiver of protection. Sec. 103(d) (50 U.S.C. app. ï¿½ 513(d)). Persons who are primarily or secondarily liable on theobligation of a person in military service may waive their benefits, but such a waiver must beexecuted in a separate instrument from that which creates the obligation. Such a waiver ceases tobe valid if the person who executed it subsequently enters active military service or is the dependentof a person who subsequently enters active duty, unless the waiver is executed after the personordered to active duty receives those orders. Citizens serving with the forces of war allies. Sec. 104 (50 U.S.C. app. ï¿½ 514). This section extends the benefits of the SCRA to citizens ofthe United States who serve in the armed forces of allies of the United States in the prosecution ofa war or military action, as long as such service is similar to service in the U.S. armed forces. TheAct eliminated the protection revocation for those who are dishonorably discharged. Notification of benefits. Sec. 105 (50 U.S.C. app. ï¿½ 515). This section requires military authorities to provide servicemembers with written information of their rights and benefits under the SCRA. Benefits to Reserves ordered to report for military service and topersons ordered to report for induction. Sec. 106 (50 U.S.C. app. ï¿½ 516). This section provides benefits under titles I, II, and III of theSCRA to servicemembers during the period of time between the date they receive their induction oractivation orders and the date they report for active duty. The coverage ends in the event the ordersto active duty are revoked. Waivers; Effects on other rights and remedies. Sec. 107 (50 U.S.C. app. ï¿½ 517). This section provides that servicemembers may waive someof the benefits of the SCRA by agreeing to modify or terminate a contract, lease or bailment, or anobligation secured by a mortgage, trust, deed, lien, or other security in the nature of a mortgage. Such a waiver is effective only if executed in writing during or after the servicemember's period ofactive military service. The written agreement must specify the legal instrument to which the waiverapplies, and if the servicemember is not a party to that instrument, the servicemember concerned. This section extends the protections to servicemembers covered under section 106 of the Act(reservists ordered into active duty and persons ordered to report for induction). Protection from adverse action due to exercise of rights. Sec. 108 (50 U.S.C. app. ï¿½ 518). This section protects the rights and credit of servicemembersfrom any penalty imposed solely due to their invocation of rights under the SCRA. In other words,a lender cannot revoke a covered person's credit card or exercise foreclosure rights merely becausethe servicemember requests the rate of interest be capped at 6% pursuant to the SCRA. It providesthat no stay, postponement, or suspension of any tax, fine, penalty, insurance premium, or other civilobligation or liability applied for, or received by, a person in military service can be the sole basisfor any of the following: (1) a determination by a lender (or other person) that the servicemember is unable to pay the civil obligation or liability; (2) a decision by a creditor to deny or to revoke credit; to change the terms of an existing credit arrangement; or to refuse to grant credit in substantially the amount, or on substantially the terms,requested; (3) an adverse creditworthiness report by, or to, a consumer credit information enterprise; (4) an insurer's refusal to sell insurance coverage; an annotation by the creditor or a person engaged in the practice of assembling or evaluatingconsumer credit information, to reference the servicemember's military status on his or hercredit report; or, a change in the terms offered or conditions required for issuance of insurance. Creditors may, however, take adverse action against a servicemember who fails to comply withobligations after they are adjusted by reason of the Act. The Act does not appear to preclude insurersor creditors from offering different terms or conditions, denying credit, or taking other adverseactions based solely on the servicemember's status in anticipation that the servicemember might laterinvoke a right under the Act. Legal representation. Sec. 109 (50 U.S.C. App. ï¿½ 519). The Act added new section 109 to clarify that legalrepresentatives, such as attorneys or persons possessing a power of attorney, may assert the benefitsof the Act when acting on the servicemember's behalf. Prior to the Act, courts had sometimesdenied a motion for a stay or other relief requested by a servicemember's attorney in an action onbehalf of the servicemember. This section states that the use of the word "servicemember" includespersons with legal authority to act on their behalf. Sections 201 through 207 describe the general relief available to servicemembers in most kindsof court actions. They serve to suspend civil liabilities of military personnel and preserve causes ofaction either for or against them. Protection against default judgments. Sec. 201 (50 U.S.C. app. ï¿½ 521). In a civil lawsuit, the failure of the defendant to appear in court may result in the award of a default judgment on behalf of the plaintiff. This section protectsservicemembers from default judgments in civil actions while they are unable to appear in court dueto military service. Before a court can grant a default judgment, the plaintiff must file an affidavitstating that the defendant is not on active duty in military service showing necessary facts to supportthe affidavit (20) or that the plaintiff was unable todetermine whether or not the defendant is in militaryservice. A false affidavit to that effect is punishable by imprisonment for up to one year, a fine ofup to $1,000, or both. The court, before entering a judgment, must also appoint an attorney torepresent the person on active duty in order to protect his or her legal rights and interests. However,if the attorney appointed to the case cannot locate the servicemember, actions by the attorney wouldnot waive any defenses of or otherwise bind the servicemember. Additionally, if the court is unableto determine if a defendant is in military service, the court may require a bond which may later beused to indemnify the defendant if it is determined that he or she was in military service and thejudgment against the defendant is set aside or vacated in part. Moreover, if a court enters a defaultjudgment against a servicemember, the court may set aside its judgment if the servicemember filesa motion within 60 days after leaving active military service and can demonstrate that militaryservice prejudiced his or her availability to appear in court (unless the default was based on a falseaffidavit by the plaintiff regarding military service of the defendant, in which case such a showingis unnecessary) and that there are meritorious or legal defenses to the suit. This is a change from theprevious SSCRA where the motion had to be filed within 30 days after leaving military service. This section does not provide a means to challenge judgments resulting from cases in which the servicemember made an appearance before the court. Some courts have found that acommunication to the court regarding the servicemember's military status, and the resultingapplicability of the SCRA to the suit, constitutes an appearance and bars the servicemember fromasserting certain defenses, (21) such as a lack ofjurisdiction of the court over the servicemember, andnegates the servicemember's right to petition to have the judgment overturned. An informalcommunication, such as a letter or a telegram to the court asking for protection under the SCRAshould not be counted as an appearance, (22) butsome courts have found that a letter from a legalassistance attorney constitutes an appearance, waiving the servicemember's protection against adefault judgment. An appearance by defendant's counsel may also waive protection, unless thecounsel was appointed pursuant to this section. Subsection (h) contains a provision to protect the rights of a bona fide purchaser by stating that vacating, setting aside, or reversing any judgment under the Act will not impair any right or titleacquired by any bona fide purchaser for value under the judgment. Therefore, it may be impossibleto recover property that had been attached to satisfy a default judgment, although the servicememberwould have the right to damages for the value of the property. Stays of proceedings when servicemember has notice. Sec. 202 (50 U.S.C. app. ï¿½ 522). A court must stay further proceedings in civil litigation wherethe servicemember's ability to participate in the litigation is materially affected by absence due tomilitary service. It applies to servicemembers who are in military service or within 90 days aftertermination or release from military service. The servicemembers must to set forth, in their application for a stay, facts stating the manner in which current military duty requirements materially affect their ability to appear and state a datewhen the servicemembers will be able to appear, and submit a letter from the servicemember'scommanding officer certifying that leave is not authorized for the servicemember to attendproceedings at that time. Courts have been divided as to how to allocate the burden of proofregarding the issue of whether the servicemember's ability to appear in court is "materially affected"by military duty. Courts must also take into account the interests of the opposing party. While a stayis a reasonable imposition upon an individual citizen on behalf of those discharging their obligationsto the common defense, it is not available to shield wrongdoing or lack of diligence or to postponerelief indefinitely, or to be used to stay proceedings in matters where the interests or safety of thegeneral public may be at stake. Courts may deny a stay in cases involving purely legal issues orwhere the servicemember is not the true party in interest, in which the servicemember's presence isnot essential. A request for a stay under this section does not constitute an appearance for jurisdictional purposes or a waiver of any substantive or procedural defense. Therefore, a servicemember mayapply for relief without waiving the right, for example, to assert that the court has no jurisdiction inthe case. Moreover, additional stays may be granted based on continuing material effect of militaryduty on the servicemember. If additional stays are denied, the court must appoint counsel to representthe servicemember. A servicemember who is unsuccessful in securing a stay under this section isprecluded from seeking the protections against default judgments granted under section 201. Thissection is inapplicable to section 301 (protection from eviction or distress). Fines and penalties under contracts. Sec. 203 (50 U.S.C. app. ï¿½ 523). Whenever an action is stayed by the court pursuant to the SCRA, penalties that would otherwise accumulate against the person for failing to carry out theterms of the contract cannot be imposed during the period the stay remains in effect. Even if no stayis in effect, the court has the discretion to relieve an active duty servicemember of the obligationsto pay any fines or penalties for failing to carry out the terms of a contract if that person's ability topay the fines and penalties or to carry out the terms of the contract is impaired by active militaryservice. Stay of enforcement. Sec. 204 (50 U.S.C. app. ï¿½ 524). If a servicemember is materially affected by reason of militaryservice in complying with a court judgement or order, the court may, on its own motion, and will onthe application of the servicemember, stay the execution of any judgment or order against theservicemember and vacate or stay an attachment or a garnishment of property, money, or debts inthe possession of the person on active duty in military service for actions or proceedingscommenced against the servicemember. This section applies to actions brought against theservicemember before the period military service or within 90 days after termination of theservicemember's. Duration and term of stays; co-defendants not in service. Sec. 205 (50 U.S.C. app. ï¿½ 525). Stays granted by courts under the SCRA can remain in effectfor the entire period of a servicemember's active duty military service plus 90 days, or any partthereof. As a practical matter, however, courts do not look favorably on protracted stays, and expectmost military members to make themselves available to participate in proceedings within areasonable period of time, especially during peacetime if the servicemember is not stationedabroad. (23) Suits against any co-defendants not inmilitary service may proceed even if the suit hasbeen stayed with respect to the person in the military. This section does not apply to sections 202(stays for actions for which the defendant has notice) and 701 (anticipatory relief). These sectionscontain their own rules for determining the maximum length of a stay granted under them. Statute of limitations. Sec. 206 (50 U.S.C. app. ï¿½ 526). In cases in which a statute of limitations would prohibit anycourt action with respect to a lawsuit brought after expiration of the time specified by law, thissection tolls (extends) the time period applicable to a covered servicemember by an amount of timeequal to the person's period of military service. That time is not counted in determining theservicemember's deadline for exercising rights such as redeeming real estate that has been sold orforfeited or to pay any other obligation or assessment. The section applies not just to courts but alsoto any other board, commission or agency, and may be exercised by the servicemember's heirs,executors, administrators, or assigns, regardless of whether the right or cause of action arose priorto or during the person's period of military service. It does not, however, apply to federal tax laws. Maximum rate of interest. Sec. 207 (50 U.S.C. app. ï¿½ 527). This section caps the maximum interest charged on any debtincurred by a servicemember prior to entering active duty at a rate of interest no higher than sixpercent (6%) a year, if that servicemember's ability to pay is materially affected by active duty status. The interest above the 6% cap is to be forgiven by the creditor and does not accrue to be owed afterthe debtor's release from active duty. The monthly payments of an obligation or liability coveredby this section is to be reduced by the amount in excess of the 6%, but the terms of the originalobligation are to remain the same. A lender seeking to charge a higher rate must get a court orderto do so. It is up to the lender to prove that the servicemember's ability to pay the higher rate is notaffected by military activation. With regard to credit card debt, the 6% rate applies only to debtincurred prior to service. Therefore, any purchases charged to the same credit card after entry intomilitary service will be subject to the full interest rate charged by the credit card. A servicemember who wrongly receives an adverse credit report or has his or her credit limit reduced or further credit denied after invoking the 6% interest cap provision may seek relief throughthe Fair Credit Reporting Act (24) (FCRA) provisionsfor "adverse actions" and consumer remedies for"willful or negligent noncompliance by credit reporting agencies upon consumer showing of causalconnection between inaccurate credit report and denial of credit or other consumer benefit." (25) Sections 301 through 308 provide protections from eviction and loss of other benefits or rightsdue to the failure of a servicemember to meet payments on rent, loans, mortgages, or insurancepolicies. Unlike the other parts of the SCRA, the rights described in these sections can be assertedby a servicemember's dependents in their own right. Evictions and distress. Sec. 301 (50 U.S.C. app. ï¿½ 531). Under this section, unless a court orders otherwise, a landlordor person with "paramount title" may not evict a servicemember in military service or his or herdependents from a rented home (such as an apartment, a trailer, or a house) if the rent is $2,400 permonth or less. In a case where the landlord seeks a court order for the eviction of a servicememberor his or her dependents, the court is obligated to stay the proceedings for up to three months if theservicemember requests it. In the alternative, the court may adjust the obligation under the lease topreserve the interests of all the parties. The $2,400 rent ceiling will be adjusted for inflation. Section 202 (stay of proceedings when servicemember has notice) of the Act is not applicable to thissection. Penalty for violation. Anyone who knowingly takes part in an eviction in violation of this section can be punished by imprisonment for up to one year,a fine as provided in Title 18, U.S. Code, or both. Persons claiming relief under this section maycollect consequential and punitive damages in cases involving wrongful eviction. Relief for landlord. This section allows the courts to grant landlords, or other person with "paramount title," equitable relief in cases where a stay isgranted. Subsection (d) of this section authorizes, if the court orders payment, the secretary of thebranch of service to order an allotment of military pay for rent of a dwelling for the wife, children,or other dependents of a person on active duty in military service. Protection under installment contracts. Sec. 302 (50 U.S.C. app. ï¿½ 532). Except by court order, no one who has collected a deposit aspartial payment for property, where the remainder of the price is to be paid in installments, canrepossess the property or cancel the sale, lease or bailment of the property because of the failure tomeet the terms of the contract, if the buyer enters active duty military service after paying the depositand subsequently breaches the terms of the contract. A violation of this section is punishable byimprisonment for up to one year, a fine as provided in Title 18, U.S.Code, or both. A court mayorder the cancellation of the installment sale, mandating the return of the property to the seller aswell as the return of paid installments to the buyer, or the court may stay the proceedings. Thissection does not permit a servicemember unilaterally to terminate the contract, although theservicemember may be able to bring an action under ï¿½ 701 for relief. Mortgages and trust deeds. Sec. 303 (50 U.S.C. app. ï¿½ 533). This section protects servicemembers who, prior to a period of active military service, entered into a property transaction subject to a mortgage, a trust deed, orsome other kind of security loan. If the servicemember is unable to make payments on the loan dueto military service, the provision prevents the vendor from exercising any right or option under thecontract to rescind or terminate the contract, resume possession of the property for nonpayment ofany installment due, or to breach the terms, except by action in a court of competent jurisdiction,until three months after the term of active duty terminates. This section does not prevent the partiesfrom entering into a written agreement with regard to repossession or forfeiture of the property afterthe servicemember's entry into active duty or receipt of notice of induction. A sale, foreclosure, orseizure of property during a servicemember's period of military service is prohibited unless undera court order issued prior to foreclosure on the property, or if made pursuant to an agreement undersection 107 of the Act. At least one court had interpreted the wording of the SSCRA, which statesan action is forbidden "unless upon an order previously granted by the court" to mean that the ordermust have been issued prior to the servicemember's entry into active duty. (26) If the servicemember breaches the terms of a mortgage, trust deed, or other loan, the court may stay any proceedings brought by the lender to enforce the terms of the agreement. The court mayalso order any other disposition of the property that it decides is fair to both the borrower and thelender. Property repossessed or other action taken without benefit of a court order is punishable byimprisonment up to one year, a fine as provided by Title 18, U.S.Code, or both, and may subject thecreditor to a suit for wrongful conversion. In addition, where a covered person can show oppression,fraud, or malice on the part of the creditor, punitive damages may be awarded. Settlement of stayed cases relating personal property. Sec. 304 (50 U.S.C. app. ï¿½ 534). If a court stays an action for foreclosure on property, repossession, or the cancellation of a sales contract against a servicemember, the court can appointthree disinterested persons to appraise the property and, on the basis of the appraisal, order anyamount it decides is fair to be paid back to the person on active duty in military service as a conditionfor allowing the foreclosure, repossession, or cancellation. Cancellation of residential or motor vehicle lease. Sec. 305 (50 U.S.C. app. ï¿½ 535). This section allows military persons who live in rental property to terminate leases they entered into prior to a period of active service. It applies to: (1)property leased for a dwelling or for professional, business, or farm use, or other similar purpose,where the person leasing the property later enters active duty in military service, or where theservicemember executes the lease while in military service and thereafter receives military ordersfor a permanent change of duty station (PCS) or to deploy with a military unit for a period of at least90 days; and (2) motor vehicle leases for personal or business transportation where the person laterenters active military service of not less than 180 days or where the servicemember executes thelease while in military service and thereafter receives PCS orders outside of the continental UnitedStates or to deploy with a military unit for at least 180 days. Servicemembers who rent premises areadvised to ensure the rental agreement contains a "military" clause to allow for early termination ofa lease in case of military orders to deploy. (27) The servicemember may terminate a property lease by delivering by hand, private business carrier or mailing return receipt a written notice and a copy of the servicemember's military ordersto the lessor or its agent. With regards to a motor vehicle lease, the servicemember must return themotor vehicle subject to such lease to the lessor or its agent no later than 15 days after the date ofdelivery of the written notice. As for a residential lease, if the lease called for monthly rent, thencancellation takes effect thirty days after the next due date for rent following the day the writtennotice is sent. For all other property leases, the cancellation is considered effective at the end of themonth following the month in which the written notice is sent. Any unpaid rent prior to the effectivecancellation must be paid to the landlord on a prorated basis. The servicemember is entitled to arefund of any prepaid rent for time after the lease is canceled within 30 days of the termination ofthe lease. A court can make adjustments if the landlord petitions the court for an "equitable offset"prior to the date the lease is effectively canceled. (28) For motor vehicle leases, the cancellation isconsidered effective on the day on which the vehicle is returned to the lessor. The lessor cannotimpose early termination fees, but the servicemember is still responsible for any taxes, summonses,title and registration fees, and any other obligation or liability under the lease such as fees forexcessive wear, use and milage. The section provides for the punishment of anybody who knowingly seizes personal effects, security deposit or any other property belonging to a person who has lawfully canceled a leasepursuant to this section. Anyone who seizes or otherwise interferes with the removal of property inorder to satisfy a claim for rent due for any time after the date of the effective cancellation of thelease may be punished by imprisonment for up to one year, a fine as provided in Title 18, U.S.Code,or both. Protection of life insurance policy. Sec 306 (50 U.S.C. app. ï¿½ 536). If a person entering military service has used a life insurancepolicy as collateral to secure a debt, this section protects the servicemember from foreclosure on thepolicy to satisfy the debt unless the assignee first obtains a court order, except in the case that theassignee is the insurance company itself (in which case the debt amounts to a policy loan). A courtmay refuse to grant the order if it determines that the servicemember's ability to repay is materiallyaffected by military service. This rule applies during the entire time the insured is on active dutyplus one year. The rule does not apply in three cases: (1) if the insured gives his or her writtenpermission to let a creditor make a claim against the policy in order to satisfy the debt involved; (2)if any premiums required under the life insurance policy are due and unpaid (excluding premiumsguaranteed under title IV of this Act); or (3) if the person whose life is insured has died. Finally, this section provides that anyone who knowingly takes or attempts action contrary to this section will be punished to imprisonment for up to a year, or a fine as provided in title 18, U.S.Code, or both. Enforcement of storage liens. Sec. 307. (50 U.S.C. app. ï¿½ 537). This section protects servicemembers with property or effectssubject to a lien, including liens for storage, repair or cleaning of property, by providing that no oneis allowed to foreclose or enforce lien during the servicemember's in military service plus threemonths unless a court finds that the servicemember's ability to meet the obligation is not materiallyaffected by military service. A court can also stay the proceedings in these types of enforcementactions or order some other disposition of the case it deems equitable to the parties. This sectiondoes not affect the scope of section 303 (mortgages and trust deeds). Finally, the section provides a penalty for anyone who knowingly takes any action contrary to its provisions. Such an action is punishable by imprisonment up to one year, a fine as provided bytitle 18, U.S.Code, or both. Dependents' rights. Sec. 308 (50 U.S.C. app. ï¿½ 538). This section extends the benefits of the rules provided undertitle III (50 U.S.C. app. ï¿½ï¿½ 531 to 537) of the SCRA to dependents of active duty personnel in theirown right. Dependents must petition a court in order to permit them to take advantage of those rules,and the court is not required to grant permission if it determines that the ability of the applicantdependents to comply with the terms of the obligation, contract, lease, or bailment has not beenmaterially impaired by the military service of the person upon whom the applicants are dependent. Title IV provides relief from insurance premiums and guarantees servicemembers continuedcoverage under certain commercial life insurance policies. Sec. 401 (50 U.S.C. app. ï¿½ 541). This section defines which life insurance policies are covered,and provides other definitions relevant to title IV of the SCRA. To be covered by the Act, the policymust be for a whole, endowment, universal, or term life insurance (other than group term lifeinsurance), or benefit similar to life insurance that comes from membership in any fraternal orbeneficial association and has to satisfy all of the following conditions: (1) the policy does not include a provision limiting the amount of insurance coverage based on the insured's military service; (2) the policy does not require the insured to pay higher premiums if he or she is in military service; (3) the policy does not include a provision that limits or restricts coverage if the insured person engages in any activity required by military service; and (4) the policy has to be "in force" (premiums have to be paid on time before any benefit guaranteed by these sections of the law can be claimed) for at least 180 days beforethe insured enters military service. 'Premium'. 'Premium' is defined as the amount specified in the policy to be paid to keep the policy in force. 'Insured'. 'Insured' is defined as a servicemember who owns a life insurance policy. 'Insurer'. 'Insurer' is defined as any firm, corporation, partnership, association, or business that can, by law, provide insurance and issue contracts orpolicies. Insurance rights and protections. Sec. 402 (50 U.S.C. app. ï¿½ 542). This section further defines who is entitled to takeadvantageof the provision and how to apply for protection, and limits total amount of covered policies to thegreater of $250,000, or an amount equal to the maximum limit of the Servicemember's Group LifeInsurance(SGLI). Either the person insured, an insured's legal representative, or, when the insuredperson is outside the United States, a beneficiary of the insurance policy must make a writtenapplication to the insurer and send a copy to the Secretary of Veterans Affairs. Application for insurance protection. Sec. 403 (50 U.S.C. app. ï¿½ 543). This section provides that to invoke protection for the policiesunder this part of the SCRA the servicemember, his or her legal representative or beneficiary, mustsubmit an application in writing identifying the policy and insurer, with an acknowledgment that theinsured's rights under the policy are subject to and modified by the provisions of title IV of this Act. The Secretary of Veterans Affairs may require the parties to provide additional information asnecessary. The insurer then reports the action to the Department of Veterans Affairs as required byregulation (found in 38 C.F.R. part 7). By making an application for the protection guaranteed bythese sections of the law, the insurer and insured are deemed to have accepted any necessarymodifications to the terms of the life insurance policy. Policies entitled to protections. Sec. 404 (50 U.S.C. app. ï¿½ 544). The Secretary of Veterans Affairs determines whether a policyis entitled to the protection guaranteed by these sections, and is responsible for notifying the insurerand the insured as to his determination. Once the policy is deemed qualified for protection, thepolicy will not lapse or be canceled or forfeited if the insured fails to pay premiums, or pay any debtor interest due on a policy loan. This protection applies during the time the insured person is inmilitary service and for two years after he or she leaves military service. Policy restrictions. Sec. 405 (50 U.S.C. app. ï¿½ 545). The approval of the Secretary of Veterans Affairs is necessaryfor a policy holder to make certain withdrawals and other payments or credits under a policyprotected by this part of the SCRA. If such approval is not obtained, rather than paying dividendsto the insured or reinvesting them to purchase additional coverage, the insurer must add dividendsto the value of the policy to be treated as a credit. The insured is not permitted to take out loansagainst the policy or cash it in while it is protected without the approval of the Secretary of VeteransAffairs. However, the insured retains the right to modify the designation of beneficiaries. Deductions of unpaid premiums. Sec. 406 (50 U.S.C. app. ï¿½ 546). If a covered policy matures due to the death of the insured, the insurance company may reduce its settlement with the beneficiaries by the amount of any unpaidpremiums (plus interest). If the rate of interest is not specified in the policy, it will be the same rateapplied to policy loans in other policies issued at the time when the insured's policy was issued. Deductions must be reported to the Secretary of Veterans Affairs. Premiums and interest guaranteed by the UnitedStates. Sec. 407 (50 U.S.C. app. ï¿½ 547). This section provides a government guarantee for premiumsand interest that become due on a policy. In the event the insured fails to pay all of the premiumsowed on a policy at the time the guarantee period expires and the cash surrender value of the policyis less than the amount due, the United States will pay the unpaid premiums and may then attemptto collect the amount from the insured. (Any funds collected from the insured are added toappropriations for the payment of guaranteed premiums under this part of the SCRA). If the unpaidpremiums do not exceed the policy's cash surrender value, the insurer will treat them as a policyloan. Moreover, any money paid by the government to an insurance provider under this section isa debt owed by the insured to the government and may not be discharged by bankruptcy. Regulations. Sec. 408 (50 U.S.C. app. ï¿½ 548). The Secretary of Veterans Affairs will promulgate regulationsto carry out the provisions of the article. Review. Sec. 409 (50 U.S.C. app ï¿½ 549). The findings of fact and conclusions made by the Secretary in administering these sections are subject to review by the Board of Veterans' Appeals and the U.S.Court of Appeals for Veterans' Claims. Judicial review is permitted only to the extent provided bychapter 72 of title 38, U.S. Code. The fifth broad category of provisions of the SCRA provides protection for certain rightsregarding public lands and protects servicemembers from having to pay certain taxes to multiplejurisdictions. It also protects servicemembers from having certain personal or real property attachedin order to satisfy tax liens. Personal and real property taxes. Sec. 501 (50 U.S.C. app. ï¿½ 561). This section applies to all taxes except income taxes, and itprotects all personal property (including motor vehicles) belonging to a person in military service,as well as all real property used by the servicemember as a home, a business, or for agriculture, aslong as the property continues to be occupied by the servicemember's family or employees. Propertybelonging to a person in military service cannot be sold to collect unpaid taxes unless a court firstgives its permission. A court may stay an action to force the sale of property belonging to a personin military service for the collection of unpaid taxes if it finds that the debtor's ability to pay thetaxes is materially affected by his or her military service. In the event a servicemember's propertyis sold for such a purpose, the servicemember has the right to redeem the property up to six monthsafter the person leaves military service, without regard to any impairment of the servicemember'sability to pay the taxes due to military service. This section will not be construed to shorten anyperiod provided by state law. Finally, the section provides that a 6% interest rate will be applied tothe assessment or lien resulting from the unpaid taxes, but that no other penalty will apply. Finally,this section applies to joint ownership of all forms of personal and real property by a servicememberand his or her dependents. Rights in public lands. Sec. 502 (50 U.S.C. app. ï¿½ 562). Persons in military service cannot be deemed to have forfeitedany right they had to use public lands of the United States prior to entering military service basedon absence from the land or failure to perform required maintenance or other improvements. Holders of permits and licenses who subsequently enter military service may suspend the licensesfor the duration of military service plus six months, allowing the servicemember to obtain areduction or cancellation of fees for the duration of that time. Desert-land entries. Sec. 503 (50 U.S.C. app. ï¿½ 563). This section protects the rights of persons inmilitary servicewho had claims to desert lands prior to entering military service. The protection lasts while theperson is in military service and for six months after he or she leaves military service or is releasedfrom hospitalization because of wounds or disability suffered while in military service. To qualifyfor this protection, the servicemember must give notice of military service to the appropriate landoffice within six months after entering military service. Mining claims. Sec. 504 (50 U.S.C. app. ï¿½ 564). This section suspends certain requirements for maintaining a mining claim during the holder's period of active military service and for six months after he orshe leaves military service or is released from hospitalization because of wounds or disabilitysuffered while in military service. During this time period, the mining claim cannot be forfeited dueto nonperformance of the requirements of the lease. To qualify for this protection, the servicemembermust notify the appropriate claims office that he or she has entered military service within 60 daysafter the end of the assessment year in which the person enters military service. Mineral permits and leases. Sec. 505 (50 U.S.C. app. ï¿½ 565). Any person who holds a permit or a lease under the federal mineral leasing laws who enters military service is allowed to suspend all operations during militaryservice (plus six months), in which case the period of service is not counted as part of the term ofthe person's permit or license but the holder is not required to pay rentals or royalties during thattime. However, to qualify for these privileges, the person has to notify the Bureau of LandManagement that he or she has entered military service within six months after entering militaryservice. Perfection or defense of rights. Sec. 506 (50 U.S.C. app. ï¿½ 566). Nothing in title V of the SCRA prevents a person in militaryservice from taking any action authorized by law or regulations of the Department of the Interior toassert, perfect, or protect the rights covered in those sections. A servicemember may submit anyevidence required to assert this right in the form of affidavits or notarized documents. Affidavitsprovided pursuant to this section are subject to 18 U.S.C. ï¿½ 1001. Distribution of information concerning benefits. Sec. 507 (50 U.S.C. app. ï¿½ 567). The Secretary concerned is responsible for providing militaryauthorities with information about the benefits of this article (except those pertaining to taxation)for distribution among servicemembers and forms to be used by applicants for these benefits. Land rights of servicemembers. Sec. 508 (50 U.S.C. app. ï¿½ 568). This section extends the protection of land rights under thisarticle to servicemembers under the age of 21. Any residency requirements related to theestablishment of a residence within a limited time will be suspended for 6 months after release frommilitary service. Regulations. Sec. 509 (50 U.S.C. app. ï¿½ 569). The Secretary of the Interior has the authority to issue regulations necessary to carry out title V of the Act, other than the sections that deal with taxes (secs.501, 510, and 511). Income taxes; residence for tax purposes. Sec. 510 (50 U.S.C. app. ï¿½ 570). The collection of income taxes (excluding Social Security (FICA) taxes) owed by a person in military service either before or after he or she entered intomilitary service is deferred while the person is in military service, and for up to six months thereafter,if the servicemember's ability to pay the taxes is impaired because of his or her military service. Nointerest or other penalty may be imposed on a debt deferred under this section. The statute oflimitations for paying the debt is tolled for the length of the person's period of military service plusnine months. Residence for tax purposes. Sec. 511 (50 U.S.C. app. ï¿½ 571). In order to prevent multiple state taxation of the property andincome of military personnel serving within various tax jurisdictions by reason of military service,this section provides that servicemembers neither lose nor acquire a state of domicile or residencefor taxation purposes when they serve at a duty station outside their home state in compliance withmilitary orders. A servicemember who conducts other business while in military service may betaxed by the appropriate jurisdiction for resulting income. This section does not protect the incomeof a spouse or other military dependant from being taxed. However, a tax jurisdiction cannot includethe military compensation earned by nonresident servicemembers to compute the tax liabilityimposed on the non-military income earned by the servicemember or spouse. Personal property ofa servicemember will not be subject to taxation by a jurisdiction other than his or her domicile orresidence when they serve at a duty station outside of their home state. However, relief frompersonal property taxes does not depend on whether the property is taxed by the State of domicile. Property used for business is not exempt from taxation. An Indian servicemember whose legalresidence or domicile is a Federal Indian reservation will only pay taxes under the laws of the FederalIndian reservation and not to the State where the reservation is located. The section defines the term "tax jurisdiction" as "a State or a political subdivision of a State," which would include the District of Columbia and any commonwealth, territory or possession of theUnited States (Sec. 101(6)). "Taxation" includes licenses, fees, or excises imposed on an automobilethat is also subject to licensing, fees or excise in the servicemember's state of residence. "Personalproperty" includes intangible and tangible property including motor vehicles. Title VI provides courts the authority to deny remedies that would abuse the purpose of theSCRA, indicates how a servicemember's military and financial status can be established in court,and covers other technicalities. Inappropriate use of the Act. Sec. 601 (50 U.S.C. app. ï¿½ 581). This section provides that a court may deny the protections of the Act with respect to a transfer it finds was made with the intent to exploit the provisions of theAct, in order to delay enforcement of the contract, to obtain reduced interest rates, or to avoidobligations with respect to property that was the subject of the transaction. Certification. Sec. 602 (50 U.S.C. app. ï¿½ 582). This section provides that a certificate signed by the Secretaryconcerned serves as prima facie evidence in an action under the SCRA that the individual is in themilitary service, date of induction or discharge, person's residence at time of induction, rank and rateof pay, and other facts relevant to asserting rights under the SCRA. A servicemember who ismissing in action is presumed to continue in military service until he or she is accounted for or hisor her death has been reported to the Department of Defense or determined by a court or board withthe authority to make such determination. Interlocutory orders. Sec. 603 (50 U.S.C. app. ï¿½ 583). This section permits courts to revoke, modify, or extend anyinterlocutory orders they has issued pursuant to the SCRA. Title VII of the SCRA provides a means for servicemembers to petition for relief withouthaving to wait until a creditor brings an enforcement action against them. It also treats powers ofattorney and provides relief from liability insurance premiums for servicemembers who need tomaintain such policies for their civilian occupations. Anticipatory relief. Sec. 701 (50 U.S.C. app. ï¿½ 591). This section provides relief similar to that provided in sections301 and 501, except that it permits the servicemember to initiate the action prior to defaulting on theobligation, rather than having to wait for the creditor to commence proceedings. Dependents do nothave independent protection under this section as they do for the provisions of Article III. Aservicemember can petition the court to stay the enforcement of any pre-service obligation orliability, including a tax obligation, while on active duty or within six months of release from activeduty. Courts may grant the following relief: (1) if the obligation involves payments of installments for the purchase of real estate (like a mortgage), the court can stay enforcement of the obligation by adding a period oftime no greater than the period of military service to the remaining life of the contract,subject to the payment of the balance of principal and accumulated interest that remainsunpaid at the termination of the applicant's military service, in equal installments over theduration of the extended life of the contract; and (2) for any other type of obligation, liability, tax, or assessment, the court can stay enforcement for a period of time equal to the petitioner's period of military service,subject to payment of the balance of principal due plus accumulated interest in equalinstallments over the duration of the stay. If a stay has been granted under this section, no fine or penalty can be imposed during the period of the stay as long as the servicemember complies with the terms and conditions of the stay. This provision allows servicemembers who are not yet in default on an obligation, but whose abilityto make payments is materially affected by military service, to petition the court in effect to rewritethe contract by extending its life, allowing the servicemember to pay down the amount in arrearswith equal installments over a longer of period of time. The servicemember must resume makingregular payments on the debt after leaving active duty, in addition to the payments to make up forthe smaller payments he or she made while on active duty. Extension of power of attorney. Sec. 702 (50 U.S.C. app. ï¿½ 592). This section provides for the automatic extension of anyvalidpower of attorney for a person who is declared to be missing in action. Unless the documentexplicitly states that it is to expire even in the event the person who executed it becomes missing inaction, the document continues in force for the entire period the person remains in missing status. It is limited to documents that designate the servicemember's spouse, parent, or named relative asthe servicemember's attorney in fact. Professional liability insurance. Sec. 703 (50 U.S.C. app. ï¿½ 593). This section provides relief for professional persons who arerequired to maintain professional liability insurance in their civilian occupation. Beginning July 31,1990, certain persons who, prior being called to active duty, were furnishing "health care services"or legal services or any other services which the Secretary of Defense determines to be "professionalservices" and who had in effect a professional liability ( i.e. , malpractice) insurance policy, maysuspend payment of premiums on their liability insurance while they serve on active duty withoutlosing any coverage. The section covers insurance policies that, according to their terms, would notcontinue to cover claims arising prior to a lapse in coverage unless the insured continues to paypremiums. Definitions. "Profession" is defined in subsection (i) to include "occupation." Similarly, the expression "professional" includes the term "occupational." Subsection (i) also defines "active duty," adoptingthe definition used in section 101 of title 10, U.S. Code. However, the provision is further limitedto persons called to active duty (other than for training) under 10 U.S.C. ï¿½ï¿½ 688 (retired membersof regular armed forces, members of the Retired Reserves, and members of the Fleet Reserve or FleetMarine Corps Reserve); 12301(a) (activation of Reserves during war or national emergency declaredby Congress); 12301(g) (member of Reserve component in captive status); 12302 (Ready Reserve);12304 (Selected Reserve and certain Individual Ready Reserve members called to active duty otherthan during war or national emergency); 12306 (Standby Reserve); 12307 (Retired Reserve); and,if any of the preceding sections are invoked, section 12301(d) (volunteer member of a Reservecomponent). Suspension of coverage. Professional liability insurance policies covered by this section are suspended from the time the insurer receives a request for protection until the insured requests in writing to have the policyreinstated. In the case of a joint insurance policy, no suspension of coverage is required for thepolicyholders who are not called to active duty. For example, if several physicians jointly purchasea group policy of malpractice insurance, and only one of them is called to active duty, the coverageof those not called to active duty need not be suspended by the insurer. Premiums. The insurer may not charge premiums for coverage that is suspended. The insurer must either refund any amount already paid for coverage that is suspended or, if the insured professional personchooses, apply the amount toward payment of any premium that comes due after coverage isreinstated. Liability during suspension. The insurer is not obligated to pay any claim that is based on a professional's actions (or inaction) during a period when a policy is suspended. In the case of claims involving obligationsimposed by state law on a professional person to assure that his or her patients or clients will receiveprofessional assistance in his or her absence to serve on active duty, the section clarifies that thefailure of the professional person to satisfy such an obligation will generally be considered to be abreach that occurred before the professional person began active duty. In such a situation, the insurerwould be liable for the claim. In the event a claim arises while the patient is receiving alternate careas arranged by the servicemember for patients during his or her absence, the insurer would not beliable for the claim. Actions against policy holder during suspension of coverage. In the event a malpractice suit (or administrative action) is filed during the period when the insurance is suspended, the litigation will be stayed until the end of the suspension period. The stayonly applies where the malpractice is alleged to have occurred before the suspension began, andwould thus be covered by the policy. Litigation stayed under this rule is deemed to be filed on thedate the suspended insurance is reinstated. The period of any stay granted under this provision is notcounted when computing whether or not the relevant statute of limitations has run. In the event that a professional person whose malpractice insurance coverage has been suspended under the section should die during the period of the suspension, any stay of litigation oradministrative action against the person under this section is lifted. In addition, the insurer providingthe coverage that was suspended is to be liable under the policy just as if the deceased person haddied while covered by the policy but before the claim was filed. Reinstatement of coverage. The insurer is required to reinstate the insurance coverage on the date the servicemember transmits a written request for reinstatement, which must occur within 30 days after the coveredservicemember is released from active duty. The insurer must notify the policy-holder of the duedate for payment of any premium required for reinstatement of the policy, and that the premium mustbe paid within 30 days after the notice is received by the professional person. The section also limitsthe premium that the insurer can charge for reinstated coverage to the rate that would have appliedif the servicemember had not been deployed. The insurer is not allowed to recoup missing premiumsby charging higher rates for reinstated coverage, but it may charge higher rates for reinstatedcoverage if it raised the rates for all policyholders with similar coverage, if the servicemember wouldhave had to pay a higher premium even if he or she had not suspended coverage. Reinstatement of health insurance. Sec. 704 (50 U.S.C. app. ï¿½ 594). This section grants servicemembers who were called to military service as described in ï¿½ 703(a)(1) the right, upon termination or release from militaryservice, to reinstatement of any health insurance policy that was in effect on the day before theservicemember entered military service, and that terminated at any time during his or her service. No new exclusions from coverage or waiting periods for reinstatement of coverage may be imposedwith respect to conditions arising prior to or during the servicemember's period of military service,if such an exclusion or waiting period would not have applied during regular coverage and thecondition has not been determined to be a disability incurred in the line of duty under 38 U.S.C. ï¿½105. The section does not apply to employer-sponsored health insurance plans covered by theprovisions of the Uniformed Services Employment and Reemployment Rights Act (USERRA). (29) Insurance plans covered by USERRA are subject to similar protections under 38 U.S.C. ï¿½ 4317.Servicemembers must apply for reinstatement within 120 days of termination or release from activeduty. Guarantee of residency for military personnel. Sec. 705 (50 U.S.C. app. ï¿½ 595). This section guarantees that military personnel are not deemedto have changed their state residence or domicile for the purpose of voting for any federal, state, orlocal office, solely because of their absence from the respective state in compliance with military ornaval orders. Business or trade obligations. Sec. 706 (50 U.S.C. app. ï¿½ 596). The assets of a servicemember are protected from attachmentsto satisfy business debts for which the servicemember is personally liable, as long as the assetssought to be attached are not held in connection with the business. The obligor would have the rightto apply to the court for a modification of the servicemember's relief where warranted by equitableconsiderations.

Summary: Recognizing the special burdens that members of the military may encounter in trying to meet their financial obligations while serving their country, Congress passed the Soldiers' and Sailors'Civil Relief Act of 1940 (SSCRA). This law has been amended from time to time, ordinarily inresponse to military operations that require the activation of the Reserves. P.L. 108-189 , the"Servicemembers Civil Relief Act (SCRA)," was enacted on December 19, 2003 and overhauls theSSCRA. This report summarizes the rights granted to persons serving on active duty in the U.S.Armed Forces under the newly enacted SCRA. SCRA is a comprehensive rewrite of the SSCRA which clarifies language that has been subject to differing interpretations by courts, and modifies or expands certain benefits. The SCRA providesprotections for servicemembers in the event that their military service impedes their ability to meetfinancial obligations incurred before their entry into active military service. The SCRA does notrequire forgiving any debts or the extinguishment of contractual obligations on behalf ofservicemembers who have been called up for active duty, nor does it provide absolute immunityfrom civil lawsuits. Instead, it suspends claims against servicemembers and protects them fromdefault judgments. The SCRA also protects military members and their families from eviction,protects against cancellation of life insurance policies or non-reinstatement of health insurancepolicies, allows some professionals to suspend malpractice or liability insurance while on activeduty, and protects from taxation in multiple jurisdictions as well as forced property sales to payoverdue taxes. The SCRA provides for a cap on interest at an annual rate of 6% on debts incurred prior to a person's entry into active duty military service, sets forth procedures for requesting such a reduction,and clarifies that the balance of interest for the servicemember's period of military service is to beforgiven by the lender. Other measures protect military families from being evicted from rentalproperty or from mortgaged property, from cancellation of life insurance, from taxation in multiplejurisdictions and from foreclosure of property to pay taxes that are due, and from losing certain rightsto public land. It raises the amount of the rent that qualifies for protection from eviction, allowsservicemembers on active duty to terminate housing leases, and allows some servicemembers toterminate automobile leases.