Many people who find themselves in financial trouble consider applying for bankruptcy as a way to resolve their debts. This situation happens to people serving in the military, as well. This is why Congress passed the Service members’ Civil Relief Act (SCRA).

The SRCA does three important things in the protection of military members. First of all, it can prevent the filing of a default judgment by a creditor. That means that nobody is allowed to report that a soldier has refused to pay his or her debts and close out their account or sue them for the amount. They have to leave the accounts open and give the military person a chance to resolve the debt. The SRCA also requires that service members be notified of all activity against their account. A creditor cannot take any action without notifying the service member, so that military members are not taken by surprise when accounts come due. Finally, the SRCA can wipe out judgments or garnishments against service members. This means that if a business or agency has sued a soldier, they are not allowed to ask for the award to be taken out of the soldier’s paycheck. Under SRCA, home foreclosures can be halted, and new payment schedules can be arranged under court order. Neither can soldiers or their families be evicted from apartments or rental properties. Insurance companies cannot cancel policies for non-payment of premiums. In addition, military members cannot be charged over six percent interest, and may request a lowering of interest if it’s not offered.

The provisions of the SRCA protect service members and their families from being harassed by creditors. These provisions also protect those connected with military families, such as relatives who help support the family who is living sacrificially on a military salary. If these supporters incur debt because of their giving to military members, they may also be eligible for the kinds of protection the SRCA offers.

The goal of the SRCA is to discourage service members from filing for bankruptcy while serving in the military. There are already significant financial burdens associated with serving in the military, and the young men and women who serve need protection from getting into deep financial holes through lack of income, or through exploitation by creditors. Invoking SRCA protection can provide more options for financial recovery than bankruptcy, and more hope for future financial health.

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