Servicemembers Civil Relief Act (SCRA)
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1 Headquarters U.S. Air Force Servicemembers Civil Relief Act (SCRA) Maj Robert Wilder Community Legal Services Division (AFLOA/JACA)
2 Overview Purpose/Definitions Default Judgments Stay Provisions Termination of Residential Leases Residence For Tax Purposes Maximum Rate of Interest - 527
3 Purpose of the SCRA (1) to provide for, strengthen, and expedite the national defense through protection extended by this Act to SM s to enable such persons to devote their entire energy to the defense needs of the Nation; and (2) to provide for temporary suspension of judicial and administrative proceedings and transactions that may adversely affect the civil rights of SMs during their military service
4 Supreme Court on SSCRA Protect those who have been obliged to drop their own affairs to take up the burdens of the nation Boone v. Lightner 319 U.S. 561, 575 (1943)
5 Liberal Construction The Act should be read with an eye friendly to those who dropped their affairs to answer their country's call. Le Maistre v. Leffers, 333 U.S. 1, 6 (1948)
6 Definitions Servicemember Active Duty Military of 5 services includes Reserves and NG under Title 10 National Guard under 32 U.S.C. 502(f) Period of more than 30 consecutive days Public Health Service Officers National Oceanic & Atmospheric Officers Dependents SM s spouse or child Person that SM provided more than 1/2 support for 180 days preceding application for relief under act
7 Definitions Court includes: All courts including bankruptcy All administrative agencies Whether or not of record A large expansion of coverage under SCRA Child support, zoning, tax appeals, professional disciplinary actions Judgment defined as any judgment, decree, order, or ruling, final or temporary Not just final judgments
8 Definitions SCRA applies to all courts & administrative agencies federal, state and local -- ALL MEANS ALL If you thought it was hard before, think of all those ALJs who have never heard of SCRA SCRA applies to civil cases only
9 Default Judgments Applies only if defendant has not appeared Plaintiff s Affidavit Whether or not defendant is in military; or If unable to determine status court may require plaintiff to post bond If defendant is a military member, court cannot enter default judgment until attorney is appointed to represent military member Appointed attorney cannot waive defenses
10 Default Judgment Stay If defendant is in military, court shall stay proceedings Minimum of 90 days on application of counsel or court s own motion Court must determine: A defense may exist that cannot be presented without presence of defendant; or After due diligence, legal counsel has been unable to contact defendant or otherwise determine if a meritorious defense exists
11 Setting Aside Default Judgments Court SHALL reopen a default judgment entered while SM on active duty or within 60 days thereafter, if it appears that: SM was materially affected by reason of that military service in making a defense to the action; and SM has a meritorious or legal defense to the action or some part of it Bona Fide purchasers protected
12 Stay Provisions Temporary delay in civil actions until SM can appear During period of service, plus 90 days SM has received notice of proceeding Mandatory 90 day stay if: SM states how military service materially affects ability to appear and date when SM can appear Commanding officer confirms duty precludes SM appearance and leave not authorized Write the letter for the client and commanding officer do it RIGHT
13 Termination of Residential Leases SCRA provisions on lease cancellation are significantly different from the old SSCRA May apply regardless of whether lease is preservice or not Takes into consideration the realities of longterm deployments on both active duty and Guard/Reserve members Obviates the need for military clauses Continue criminal penalties for noncompliance by lessors
14 Termination of Residential Leases Applies to pre-service leases of premises; or Residential leases signed by SM (or on SM s behalf) after entering military service when SM receives PCS orders or deployment orders for not less than 90 days Qualifying lease is terminated by delivery of written notice with copy of orders to lessor or lessor s agent (hand delivery, mail, Fed Ex) Termination by SM also terminates lease cosigned by spouse (2004 technical amendment)
15 Termination of Residential Termination effective: Leases If rent payable monthly 30 days after first date next payment due after notice is delivered All others last day of month following month in which notice is delivered Rentals unpaid for period preceding the effective date of termination must be prorated and paid
16 Recent Success Story Capt Joel Lofgren AFLOA/JAQ, formerly assigned to 55 WG, Offutt AFB NE DOJ Referral of SCRA Violation Yielded Big Results: $12,500 to Servicemembers
17 Residence For Tax Purposes Applies to income and personal property tax Can be taxed only be state of SM s domicile Applies only to military pay May not use the military pay to gross-up combined income into a higher bracket (overrules the Kansas Rule ) Protects Native American SM from State Income Tax if Indian Reservation domicile
18 Recent Success Story Capt Anna Magazinnik 2 BW, Barksdale AFB LA Triumphed over Louisiana Department of Revenue
19 Maximum Rate of Interest Pre-Service loans incurred by SM, or SM and spouse jointly But not guaranteed student loans For duration of SM s military service Cap of 6% per annum; all excess FORGIVEN Have to recompute payments at 6% rate Cap rescinded if creditor shows SM s service has no material effect on ability to pay debt SM must give written notice with copy of orders
20 Maximum Rate of Interest Two kinds of obligations or liabilities now defined: Obligations secured by a mortgage, trust deed or other security in the nature of a mortgage All other obligations For obligations secured by a mortgage, the duration of the 6% cap is now extended to one year after REFRAD For all other obligations, the 6% cap ends at REFRAD
21 Recent Success Story Capt Mark Bruegger ADC JB Andrews MD, formerly assigned to 355 FW, Davis-Monthan AFB AZ Even BIGGER SCRA win -- Referral to DOJ resulted in $12 million settlement
22 Summary Purpose/Definitions Default Judgments Stay Provisions Termination of Residential Leases Residence For Tax Purposes Maximum Rate of Interest - 527
23 Questions?
24 Contact Information Colonel Scott: DSN ; commercial (240) Major Wilder: DSN ; commercial (240) TSgt Zaldivar/Organizational account: DSN ; commercial (240)
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