The Servicemembers Civil Relief Act (P.L. 108-189)

CRS Report for Congress
The Servicemembers Civil Relief Act
(P.L. 108-189)
April 20, 2004
Estela I. Velez Pollack
Legislative Attorney
American Law Division

Congressional Research Service ˜ The Library of Congress

The Servicemembers Civil Relief Act (P.L. 108-189)
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 in response 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 the SSCRA. 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 provides protections for servicemembers in the event
that their military service impedes their ability to meet financial obligations incurred
before their entry into active military service. The SCRA does not require forgiving
any debts or the extinguishment of contractual obligations on behalf of
servicemembers who have been called up for active duty, nor does it provide absolute
immunity from civil lawsuits. Instead, it suspends claims against servicemembers
and protects them from default judgments. The SCRA also protects military
members and their families from eviction, protects against cancellation of life
insurance policies or non-reinstatement of health insurance policies, allows some
professionals to suspend malpractice or liability insurance while on active duty, and
protects from taxation in multiple jurisdictions as well as forced property sales to pay
overdue 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 be forgiven by the lender.
Other measures protect military families from being evicted from rental property or
from mortgaged property, from cancellation of life insurance, from taxation in
multiple jurisdictions and from foreclosure of property to pay taxes that are due, and
from losing certain rights to public land. It raises the amount of the rent that
qualifies for protection from eviction, allows servicemembers on active duty to
terminate housing leases, and allows some servicemembers to terminate automobile
leases.

Contents
I. General Provisions...............................................2
Definitions ...................................................3
‘Servicemember’ ..........................................3
‘Military Service’..........................................3
‘Period of military service’..................................4
‘Dependent’ ..............................................4
‘Court’ ..................................................5
‘State’ ...................................................5
‘Secretary Concerned’......................................5
‘Motor Vehicle’...........................................5
Jurisdiction and Application.....................................5
Protection of persons secondarily liable........................6
Criminal bail bond sureties..................................6
Waiver of protection.......................................7
Citizens serving with the forces of war allies....................7
Notification of benefits.....................................7
Benefits to Reserves ordered to report for military service and to persons
ordered to report for induction............................7
Waivers; Effects on other rights and remedies...................7
Protection from adverse action due to exercise of rights............8
Legal representation........................................8
II. General Relief..................................................9
Protection against default judgments...........................9
Stays of proceedings when servicemember has notice............10
Fines and penalties under contracts...........................11
Stay of enforcement.......................................11
Duration and term of stays; co-defendants not in service..........11
Statute of limitations......................................11
Maximum rate of interest...................................12
III. Rent, Installment Contracts, Mortgages, Liens, Assignments, Leases.....12
Evictions and distress......................................13
Protection under installment contracts.........................13
Mortgages and trust deeds..................................13
Settlement of stayed cases relating personal property.............14
Cancellation of residential or motor vehicle lease................14
Protection of life insurance policy............................15
Enforcement of storage liens................................16
Dependents’ rights........................................16
IV. Life Insurance................................................16
Definitions ..................................................16
Insurance rights and protections.............................17
Application for insurance protection..........................17
Policies entitled to protections...............................17
Policy restrictions.........................................18

Premiums and interest guaranteed by the United States...........18
Regulations .............................................18
Review .................................................18
V. Taxes and Public Lands.........................................19
Personal and real property taxes.............................19
Rights in public lands.....................................19
Desert-land entries........................................19
Mining claims...........................................20
Mineral permits and leases..................................20
Perfection or defense of rights...............................20
Distribution of information concerning benefits.................20
Land rights of servicemembers..............................20
Regulations .............................................21
Income taxes; residence for tax purposes......................21
Residence for tax purposes.................................21
VI. Administrative Remedies.......................................22
Inappropriate use of the Act.................................22
Certification .............................................22
Interlocutory orders.......................................22
VII. Further Relief................................................22
Anticipatory relief........................................22
Extension of power of attorney..............................23
Professional liability insurance..............................23
Reinstatement of health insurance............................25
Guarantee of residency for military personnel...................26
Business or trade obligations................................26

The Servicemembers Civil Relief Act
(P.L. 108-189)
The increasing number of activations of Reserve and National Guard military
units for support in the war against terrorism or the war in Iraq means that a growing
number of Americans may be entitled to invoke civil protections provided to them
on the basis of their service in the Armed Forces. This led to calls for a re-
examination of the Soldier’s and Sailors’ Civil Relief Act of 1940 (SSCRA) which
provided servicemembers certain civil protections. P.L. 108-189, the
“Servicemembers Civil Relief Act (SCRA),” enacted on December 19, 2003,
restates and strengthens the protections available to servicemembers. This report
summarizes the SCRA, and describes other legislative efforts aimed at amending the
former SSCRA.
Congress has long recognized the need for protective legislation for
servicemembers whose service to the nation compromises their ability to meet
obligations and protect their legal interests. During the Civil War, Congress enacted
an absolute moratorium on civil actions brought against soldiers and sailors. During
World War I, Congress passed the Soldiers’ and Sailors’ Civil Relief Act of 1918,¹
which did not create a moratorium on legal actions against servicemembers, but
instead directed trial courts to apply principles of equity to determine the appropriate
action to take whenever a servicemember’s rights were involved in a controversy.
During World War II, Congress essentially reenacted the expired 1918 statute as the
Soldiers’ and Sailors’ Civil Relief Act of 1940, and then amended it substantially in
1942 to take into account the new economic and legal landscape that had developed
between the wars. Congress has enacted amendments on several occasions during
subsequent conflicts, including in the 107^th Congress, when the benefits of the
SSCRA were extended to certain members of the National Guard called up by their
respective state governors to support federal efforts during national emergencies
(such as the war against terrorism).² Most recently, on December 19, 2003,
Congress enacted P.L. 108-189.

¹ 40 Stat. 440 (1918).
² P.L. 107-330. The 107^th Congress also held hearings on H.R. 5111, the Servicemembers’
Civil Relief Act, but delayed further action on that bill until the 108^th Congress. It was
reintroduced as H.R. 100 with only a few changes, and passed the House of Representatives
on May 7, 2003. The Senate Committee on Veterans’ Affairs held hearings July 10, 2003,
on two companion bills to H.R. 100, as well as other proposed changes to the SSCRA.

The SCRA³ is an exercise of Congress’ power to raise and support armies (U.S.
Const. Art. I, sec. 8, cl. 12) and to declare war (Art. I, sec. 8, cl. 11).⁴ In order to
lessen the potential hardship suffered by those whose entry into active duty military
service materially affects their ability to meet financial obligations and to protect
their legal interests, the SCRA provides certain rights and other types of legal
protection, to enable servicemembers to devote their full attention to their military
duties. The law does not forgive any debts or extinguish contractual obligations on
behalf of servicemembers who have been called up for active duty, nor does it
provide absolute immunity to servicemembers from civil lawsuits. Instead, it
provides for the suspension of claims against servicemembers and protection from
default judgments, as well as certain other contractual rights and protections. In this
way, it seeks to balance the interests of servicemembers with those of their creditors
and others to whom the servicemember owes a legal obligation, spreading the burden
of national military service to a broader portion of the citizenry.
Many of the SCRA provisions are especially beneficial for Reservists activated
to respond to a national crisis, but many provisions are also useful for career military
personnel.⁵ One of the measures that affects many who are called to active duty is
the SCRA’s cap on interest at an annual rate of 6% on debts incurred prior to a
person’s entry into active duty military service (Sec. 207). Other measures protect
military families from being evicted from rental property or from mortgaged property
(Secs. 301 and 303); from cancellation of life insurance (Secs. 402 through 409);
from taxation in multiple jurisdictions (Sections 510 and 511) and from foreclosure
of property to pay taxes that are due (Secs. 501 and 511); and from losing certain
rights to public land (Secs. 501 through 508).
This report summarizes the SCRA section by section, as enacted by P.L. 108-

189, codified in 50 U.S.C. app. § 502 et seq. It will be updated as necessary.

I. General Provisions
Sec. 2 (50 U.S.C. app. § 502). The purpose of the Act is to provide for,
strengthen, and expedite the national defense through protection to servicemembers,
to enable them to “devote their entire energy to the defense needs of the Nation.”
The SCRA protects servicemembers by temporarily suspending certain judicial and
administrative proceedings and transactions that may adversely affect their civil
rights during their military service.

³ One of the amendments effected by P.L. 108-189 is the change in the name of the Act from
Soldiers’ and Sailors’ Civil Relief Act (SSCRA) to Servicemembers Civil Relief Act
(SCRA). Therefore, all of the historical and legal background of this Act makes reference
to SSCRA instead of SCRA. This report will use the current name of the Act, SCRA, when
making reference to any historical or legal background information.
⁴ Dameron v. Brodhead, 345 U.S. 322 (1953).
⁵ See James P. Pottorff, Contemporary Applications of the Soldiers’ and Sailors’ Civil Relief
Act, 132 M^IL.L.R^EV. 115, 118 (1991) (noting that many protections are ordinarily
unavailable to career servicemembers because they enter into most major legal and financial
obligations, such as mortgages, while on active duty).

Definitions
Sec. 101 (50 U.S.C. app. § 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. § 101(a)(5), which includes the Army, Navy, Air Force, Marine
Corps, Coast Guard, and the commissioned corps of the National Oceanic and
Atmospheric Administration and the Public Health Service.
‘Military Service’.
The Act defines “military service” to include “active duty” as defined in 10
U.S.C. § 101(d)(1), National Guard service as service under a call to active service
authorized by the President or the Secretary of Defense for a period more than 30
consecutive days under 32 U.S.C. § 502(f)⁶ for purposes of responding to a national
emergency declared by the President and supported by Federal funds, for officers of
the Public Health Service or the National Oceanic and Atmospheric Administration,
“active service” (not further defined), and any period during which a servicemember
is absent from duty on account of sickness, wounds, leave, or other lawful case.
“Active duty” for armed services is defined in 10 U.S.C. 101(d)(1) as “full-time duty
in the active military service of the United States ... [including] full-time training
duty, annual training duty, and attendance, while in the active military service, at a
school designated as a service school by law or by the Secretary of the military
department concerned.” “Active military service” is not further defined in section
101 of title 10, U.S. Code, although “active service” is given the meaning “service
on active duty or full-time National Guard duty,” in § 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 into military service.” Under the new law, persons
on active duty and attending a service school are covered, 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. § 101(d)
covers training as a member of the Reserve Officer Training Corps⁷ or attendance at
a military academy.⁸

⁶ 32 U.S.C. § 502(f) states that under regulations from the Secretary of the Army or the
Secretary of the Air Force, a member of the National Guard may be ordered to perform
training or other duty in addition to the mandatory yearly training.
⁷ See Brown v. United States, 151 F.3d 800 (8^th Cir. 1998) (finding that senior ROTC
training activities are “active military service” under the Veterans Benefits Act)
⁸ The question does not appear to have been tested in court, possibly due to the unlikelihood
that a person attending a service academy would be materially affected by such status. In
contexts other than the SCRA, military cadets have been considered to be in active military
(continued...)

‘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 new meaning 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 complete severance 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.⁹ The
phrase is used in the SCRA to determine the length of the availability of certain
benefits. The SCRA also uses the phrase “termination or release from military
service” in some provisions, but does not provide a 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. § 101¹⁰), or another individual for
whom the servicemember provided more than one half of the support in the 180 days
prior to an application for relief under the Act. This language appears to codify
courts’ treatment of the term “dependent” as relating to financial dependency rather

⁸ (...continued)
service for some purposes. See Collins v. United States, 642 F.2d 217, 220-21 (7th Cir.),
cert. denied 452 U.S. 964 (1981) (finding a cadet at the Air Force Academy to be on active
duty for purposes of applying the Feres doctrine to prohibit his bringing suit against the
government); Porath v. McVey, 884 S.W.2d 692 (Mo.App.S.D.1994) (West Point cadet was
considered to be on active duty for the purpose of determining whether he was
“emancipated,” under state law, for child support purposes), Bishop v. Bishop, 671 A.2d 644
(N.J.Super.Ch.,1995) (same); Minnich v. World War II Service Compensation Bd., 57
N.W.2d 803 (Iowa 1953) (plaintiff awarded military bonus for time during World War II as
military cadet based on definition of “active duty” that included “active service” at an
“armed forces school”).
⁹ 53A Am.Jur. 2d Military and Civil Defense § 183.
¹⁰ 38 U.S.C. § 101(4) defines child as a person who is unmarried and under the age of
eighteen; who before attaining the age of eighteen became permanently incapable of self-
support; or who after attaining the age of eighteen and until completion of education or
training (but not after attaining the age of twenty-three) is pursuing a course of instruction
at an approved educational institution; and who is a legitimate child, a legally adopted child,
a stepchild who is a member of a veteran’s household or was a member at the time of the
veteran’s death, or an illegitimate child but, as to the alleged father, only if acknowledged
in writing signed by him, or if he has been judicially ordered to contribute to the child’s
support or has been, before his death, judicially decreed the father of such child, or if he is
otherwise shown by evidence to be the father of the said child.

than strict familial relationships,¹¹ although the formula for determining what portion
of support is required appears to be new.¹²
‘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.
‘S ta te ’.
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. § 101(a)(9)¹³; with respect to
commissioned officers of the Public Health Service, the Secretary of Health and
Human Services; and with respect to commissioned officers of the 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 vehicle operated only on a rail line (as defined in 49 U.S.C.
§ 30102(a)(6)).
Jurisdiction and Application
Sec. 102 (50 U.S.C. app. § 512). The SCRA applies everywhere in the United
States, including the District of Columbia, and in any territory “subject to the
jurisdiction of” the United States. It applies to any civil judicial or administrative

¹¹ See, e.g., Balconi v. Dvascas, 507 N.Y.S. 2d 788 (N.Y. Civ. Ct. 1986)(finding ex-spouse
of serviceman who relied on his child support payments to be a “dependent” within the
meaning of the SCRA who could assert the protection against eviction).
¹² See id. It is not clear how much support the plaintiff in that case had been receiving from
her ex-husband; it is conceivable that she might not be covered under the proposed
definition.
¹³ 10 U.S.C. § 101(a)(9) defines “Secretary” as the Secretary of the Army with respect to
Army matters; the Secretary of the Navy with respect to matters concerning the Navy,
Marine Corps, and the Coast Guard when it is operating as a service of the Department of
the Navy; the Secretary of the Air Force with respect to matters concerning the Air Force;
and the Secretary of Homeland Security with respect to matters concerning the Coast Guard
when it is not operating as a service in the Department of the Navy.

proceeding in any court or agency in any jurisdiction subject 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. § 513(a-b)). These subsections extend some
protection to persons who share a debt with one or more covered servicemembers or
have secondary liability as a “surety, guarantor, endorser, accommodation maker, co-
maker, or other person who is or may be primarily or secondarily subject to the
obligation or liability” at issue. If the SCRA provisions are invoked as to the
servicemember, the court has discretion to grant a stay, postponement, or suspension
of the proceedings against such persons, or to set aside or vacate a judgment.
Whether a court grants such relief appears to be influenced by equitable
considerations, including whether the servicemember is able to appear in court,
whether the servicemember’s presence is necessary for the defense, and whether an
unjust forfeiture could otherwise result. If the servicemember is only nominally a
party to the suit, as in cases of negligence where the insurance company might be
considered the “true defendant,” the modern trend is to deny a stay.¹⁴ The right to
open a default judgment taken against a person in the military service is reserved to
that person only and is not available to a judgment co-debtor.
The Act added the term “co-maker”¹⁵ to the list of persons who may be entitled
to a stay in an action which has been stayed with respect to a servicemember. This
effectively codifies courts’ interpretations of the previous version of the SCRA.¹⁶
However, it does not explicitly adopt the test some courts have used to determine
whether a stay is appropriate.
Criminal bail bond sureties.
Sec. 103(c) (50 U.S.C. app. § 513(3)). This subsection protects bail bondsmen
who are unable to 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 the accused, and has the discretion to return
the bail in its entirety to the bail bondsman in the interest of equity and justice.
While some courts have interpreted this subsection to allow for no discretion,¹⁷ others
have required sureties to make a further showing that the appearance of the principal

¹⁴ See Tabor v. Miller, 369 F.Supp. 647 (D. Pa.), aff’d, 389 F.2d 645 (3d Cir.), cert. denied
sub nom Stearns v. Tabor, 391 U.S. 915 (1968) (where servicemember did not claim he was
precluded by service from appearing and his insurer had rejected an offer to settle within the
limits of the policy, stay of proceedings was denied).
¹⁵ A co-maker is “one of two or more persons who sign an instrument to indicate a promise
to pay a financial obligation. Any co-maker may be sued for the entire amount of the
indebtedness, although a co-maker who is forced to pay more than his or her share may seek
contribution from the other co-makers.” M^ERRI^AM-W^EBSTER’^SD^I^C^TI^{ONARY OF}L^AW
(2001).
¹⁶ Modern Industrial Bank v. Zaentz, 29 N.Y.S.2d 969 (N.Y.Mun.Ct. 1941); Modern
Industrial Bank v. Grossman, 40 N.Y.S.2d 628 (1943).
¹⁷ See United States v. Jeffries, 140 F. 2d 745 (7^th Cir. 1944).

was in fact prevented due to military service and that the surety made an effort to
secure the appearance of the principal in court.¹⁸
Waiver of protection.
Sec. 103(d) (50 U.S.C. app. § 513(d)). Persons who are primarily or secondarily
liable on the obligation of a person in military service may waive their benefits, but
such a waiver must be executed in a separate instrument from that which creates the
obligation. Such a waiver ceases to be valid if the person who executed it
subsequently enters active military service or is the dependent of a person who
subsequently enters active duty, unless the waiver is executed after the person
ordered to active duty receives those orders.
Citizens serving with the forces of war allies.
Sec. 104 (50 U.S.C. app. § 514). This section extends the benefits of the SCRA
to citizens of the United States who serve in the armed forces of allies of the United
States in the prosecution of a war or military action, as long as such service is similar
to service in the U.S. armed forces. The Act eliminated the protection revocation for
those who are dishonorably discharged.
Notification of benefits.
Sec. 105 (50 U.S.C. app. § 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 to
persons ordered to report for induction.
Sec. 106 (50 U.S.C. app. § 516). This section provides benefits under titles I,
II, and III of the SCRA to servicemembers during the period of time between the date
they receive their induction or activation orders and the date they report for active
duty. The coverage ends in the event the orders to active duty are revoked.
Waivers; Effects on other rights and remedies.
Sec. 107 (50 U.S.C. app. § 517). This section provides that servicemembers
may waive some of the benefits of the SCRA by agreeing to modify or terminate a
contract, lease or bailment, or an obligation 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 of active military
service. The written agreement must specify the legal instrument to which the waiver
applies, and if the servicemember is not a party to that instrument, the servicemember
concerned. This section extends the protections to servicemembers covered under

¹⁸ See Ex parte Moore, 12 So.2d 77 (Ala. 1943); Cumbie v. State, 367 S.W.2d 693 (Tex.
Civ. App. 1963).

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. § 518). This section protects the rights and credit of
servicemembers from 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 because the servicemember requests the
rate of interest be capped at 6% pursuant to the SCRA. It provides that no stay,
postponement, or suspension of any tax, fine, penalty, insurance premium, or other
civil obligation or liability applied for, or received by, a person in military service
can be the sole basis for 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;
(5)an annotation by the creditor or a person engaged in the practice of assembling
or evaluating consumer credit information, to reference the servicemember’s
military status on his or her credit report; or,
(6)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 with obligations after they are adjusted by reason of the Act. The Act does
not appear to preclude insurers or creditors from offering different terms or
conditions, denying credit, or taking other adverse actions based solely on the
servicemember’s status in anticipation that the servicemember might later invoke a
right under the Act.
Legal representation.
Sec. 109 (50 U.S.C. App. § 519). The Act added new section 109 to clarify that
legal representatives, such as attorneys or persons possessing a power of attorney,
may assert the benefits of the Act when acting on the servicemember’s behalf. Prior
to the Act, courts had sometimes denied a motion for a stay or other relief requested
by a servicemember’s attorney in an action on behalf of the servicemember. This
section states that the use of the word “servicemember” includes persons with legal
authority to act on their behalf.

II. General Relief
Sections 201 through 207 describe the general relief available to
servicemembers in most kinds of court actions. They serve to suspend civil liabilities
of military personnel and preserve causes of action either for or against them.
Protection against default judgments.
Sec. 201 (50 U.S.C. app. § 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 protects servicemembers from default judgments in civil
actions while they are unable to appear in court due to military service. Before a
court can grant a default judgment, the plaintiff must file an affidavit stating that the
defendant is not on active duty in military service showing necessary facts to support
the affidavit¹⁹ or that the plaintiff was unable to determine whether or not the
defendant is in military service. A false affidavit to that effect is punishable by
imprisonment for up to one year, a fine of up to $1,000, or both. The court, before
entering a judgment, must also appoint an attorney to represent 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 would
not waive any defenses of or otherwise bind the servicemember. Additionally, if the
court is unable to determine if a defendant is in military service, the court may
require a bond which may later be used to indemnify the defendant if it is determined
that he or she was in military service and the judgment against the defendant is set
aside or vacated in part. Moreover, if a court enters a default judgment against a
servicemember, the court may set aside its judgment if the servicemember files a
motion within 60 days after leaving active military service and can demonstrate that
military service prejudiced his or her availability to appear in court (unless the default
was based on a false affidavit by the plaintiff regarding military service of the
defendant, in which case such a showing is unnecessary) and that there are
meritorious or legal defenses to the suit. This is a change from the previous 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 a communication to the court regarding the servicemember’s military
status, and the resulting applicability of the SCRA to the suit, constitutes an
appearance and bars the servicemember from asserting certain defenses,²⁰ such as a
lack of jurisdiction of the court over the servicemember, and negates the
servicemember’s right to petition to have the judgment overturned. An informal
communication, such as a letter or a telegram to the court asking for protection under

¹⁹ This requirement may be satisfied by a statement, declaration, verification, or certificate,
in writing, under oath.
²⁰ See Blankenship v. Blankenship, 263 Ala. 297, 82 So. 2d 335 (1978); Vara v. Vara, 14
Ohio 2d 261, 171 N.E.2d 384 (1961); Reynolds v. Reynolds, 21 Cal. 2d 580, 134 P.2d 251
(1943).

the SCRA should not be counted as an appearance,²¹ but some courts have found that
a letter from a legal assistance attorney constitutes an appearance, waiving the
servicemember’s protection against a default judgment. An appearance by
defendant’s counsel may also waive protection, unless the counsel 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 title acquired by any bona fide purchaser for value under the
judgment. Therefore, it may be impossible to recover property that had been attached
to satisfy a default judgment, although the servicemember would 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. § 522). A court must stay further proceedings in civil
litigation where the servicemember’s ability to participate in the litigation is
materially affected by absence due to military service. It applies to servicemembers
who are in military service or within 90 days after termination 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 date when the servicemembers will be able to appear, and
submit a letter from the servicemember’s commanding officer certifying that leave
is not authorized for the servicemember to attend proceedings at that time. Courts
have been divided as to how to allocate the burden of proof regarding 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 stay is a reasonable imposition upon an individual citizen on behalf of those
discharging their obligations to the common defense, it is not available to shield
wrongdoing or lack of diligence or to postpone relief indefinitely, or to be used to
stay proceedings in matters where the interests or safety of the general public may be
at stake. Courts may deny a stay in cases involving purely legal issues or where the
servicemember is not the true party in interest, in which the servicemember’s
presence is not 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 may apply for relief without waiving the right, for
example, to assert that the court has no jurisdiction in the case. Moreover, additional
stays may be granted based on continuing material effect of military duty on the
servicemember. If additional stays are denied, the court must appoint counsel to

²¹ See Kramer v. Kramer, 668 S.W. 2d 457 (Tex. Ct. App. 1984) (letter from servicemember
invoking the SCRA and requesting a stay did not constitute an “appearance” for the purpose
of providing personal jurisdiction); see generally United States Judge Advocate General
School, Soldier’s and Sailor’s Civil Relief Act Guide, JA-260, § 3-2 (2000)[hereinafter “JA-

260"].

represent the servicemember. A servicemember who is unsuccessful in securing a
stay under this section is precluded from seeking the protections against default
judgments granted under section 201. This section is inapplicable to section 301
(protection from eviction or distress).
Fines and penalties under contracts.
Sec. 203 (50 U.S.C. app. § 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 the terms of the contract cannot be imposed during the period
the stay remains in effect. Even if no stay is in effect, the court has the discretion to
relieve an active duty servicemember of the obligations to pay any fines or penalties
for failing to carry out the terms of a contract if that person’s ability to pay the fines
and penalties or to carry out the terms of the contract is impaired by active military
service.
Stay of enforcement.
Sec. 204 (50 U.S.C. app. § 524). If a servicemember is materially affected by
reason of military service in complying with a court judgement or order, the court
may, on its own motion, and will on the application of the servicemember, stay the
execution of any judgment or order against the servicemember and vacate or stay an
attachment or a garnishment of property, money, or debts in the possession of the
person on active duty in military service for actions or proceedings commenced
against the servicemember. This section applies to actions brought against the
servicemember before the period military service or within 90 days after termination
of the servicemember’s.
Duration and term of stays; co-defendants not in service.
Sec. 205 (50 U.S.C. app. § 525). Stays granted by courts under the SCRA can
remain in effect for the entire period of a servicemember’s active duty military
service plus 90 days, or any part thereof. As a practical matter, however, courts do
not look favorably on protracted stays, and expect most military members to make
themselves available to participate in proceedings within a reasonable period of time,²²
especially during peacetime if the servicemember is not stationed abroad. Suits
against any co-defendants not in military service may proceed even if the suit has
been 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 sections contain their own rules for determining the
maximum length of a stay granted under them.
Statute of limitations.
Sec. 206 (50 U.S.C. app. § 526). In cases in which a statute of limitations
would prohibit any court action with respect to a lawsuit brought after expiration of

²² See Roger M. Baron, The Staying Power of the Soldiers’ and Sailors’ Civil Relief Act,

32 S^ANTAC^LARAL.R^EV.137 (1992).

the time specified by law, this section tolls (extends) the time period applicable to a
covered servicemember by an amount of time equal to the person’s period of military
service. That time is not counted in determining the servicemember’s deadline for
exercising rights such as redeeming real estate that has been sold or forfeited or to
pay any other obligation or assessment. The section applies not just to courts but also
to 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 prior to 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. § 527). This section caps the maximum interest
charged on any debt incurred by a servicemember prior to entering active duty at a
rate of interest no higher than six percent (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 after the debtor’s
release from active duty. The monthly payments of an obligation or liability covered
by this section is to be reduced by the amount in excess of the 6%, but the terms of
the original obligation are to remain the same. A lender seeking to charge a higher
rate must get a court order to do so. It is up to the lender to prove that the
servicemember’s ability to pay the higher rate is not affected by military activation.
With regard to credit card debt, the 6% rate applies only to debt incurred prior to
service. Therefore, any purchases charged to the same credit card after entry into
military 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 cap²³
provision may seek relief through the Fair Credit Reporting Act (FCRA) provisions
for “adverse actions” and consumer remedies for “willful or negligent noncompliance
by credit reporting agencies upon consumer showing of causal connection between
inaccurate credit report and denial of credit or other consumer benefit.”²⁴
III. Rent, Installment Contracts, Mortgages, Liens,
Assignments, Leases
Sections 301 through 308 provide protections from eviction and loss of other
benefits or rights due to the failure of a servicemember to meet payments on rent,
loans, mortgages, or insurance policies. Unlike the other parts of the SCRA, the
rights described in these sections can be asserted by a servicemember’s dependents
in their own right.

²³ Fair Credit Reporting Act, 84 Stat. 1128, codified at 15 U.S.C. §§1681 et seq.
²⁴ See JA-260, supra note 21, at § 3-8.

Evictions and distress.
Sec. 301 (50 U.S.C. app. § 531). Under this section, unless a court orders
otherwise, a landlord or person with “paramount title” may not evict a
servicemember in military service or his or her dependents from a rented home (such
as an apartment, a trailer, or a house) if the rent is $2,400 per month or less. In a case
where the landlord seeks a court order for the eviction of a servicemember or his or
her dependents, the court is obligated to stay the proceedings for up to three months
if the servicemember requests it. In the alternative, the court may adjust the
obligation under the lease to preserve 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 this section.
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 may collect 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 is granted.
Subsection (d) of this section authorizes, if the court orders payment, the secretary
of the branch 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. § 532). Except by court order, no one who has
collected a deposit as partial payment for property, where the remainder of the price
is to be paid in installments, can repossess the property or cancel the sale, lease or
bailment of the property because of the failure to meet the terms of the contract, if the
buyer enters active duty military service after paying the deposit and subsequently
breaches the terms of the contract. A violation of this section is punishable by
imprisonment for up to one year, a fine as provided in Title 18, U.S.Code, or both.
A court may order the cancellation of the installment sale, mandating the return of
the property to the seller as well as the return of paid installments to the buyer, or the
court may stay the proceedings. This section does not permit a servicemember
unilaterally to terminate the contract, although the servicemember may be able to
bring an action under § 701 for relief.
Mortgages and trust deeds.
Sec. 303 (50 U.S.C. app. § 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, or some other kind of security loan. If the servicemember
is unable to make payments on the loan due to military service, the provision
prevents the vendor from exercising any right or option under the contract to rescind
or terminate the contract, resume possession of the property for nonpayment of any
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 parties from entering into a written agreement with regard to
repossession or forfeiture of the property after the servicemember’s entry into active
duty or receipt of notice of induction. A sale, foreclosure, or seizure of property
during a servicemember’s period of military service is prohibited unless under a court
order issued prior to foreclosure on the property, or if made pursuant to an agreement
under section 107 of the Act. At least one court had interpreted the wording of the
SSCRA, which states an action is forbidden “unless upon an order previously granted
by the court” to mean that the order must have been issued prior to the
servicemember’s entry into active duty.²⁵
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 may also order any other disposition of the property that it
decides is fair to both the borrower and the lender. Property repossessed or other
action taken without benefit of a court order is punishable by imprisonment up to one
year, a fine as provided by Title 18, U.S.Code, or both, and may subject the creditor
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. § 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 appoint three disinterested persons to appraise the
property and, on the basis of the appraisal, order any amount it decides is fair to be
paid back to the person on active duty in military service as a condition for allowing
the foreclosure, repossession, or cancellation.
Cancellation of residential or motor vehicle lease.
Sec. 305 (50 U.S.C. app. § 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 the servicemember executes the lease
while in military service and thereafter receives military orders for a permanent
change of duty station (PCS) or to deploy with a military unit for a period of at least
90 days; and (2) motor vehicle leases for personal or business transportation where
the person later enters active military service of not less than 180 days or where the
servicemember executes the lease while in military service and thereafter receives
PCS orders outside of the continental United States or to deploy with a military unit
for at least 180 days. Servicemembers who rent premises are advised to ensure the

²⁵ Syracuse Savings Bank v. Brown, 181 Misc. 999, 42 N.Y.S. 2d 156 (N.Y. Sup. Ct. 1943).

rental agreement contains a “military” clause to allow for early termination of a lease
in case of military orders to deploy.²⁶
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 orders to the lessor or its agent. With regards to a motor
vehicle lease, the servicemember must return the motor vehicle subject to such lease
to the lessor or its agent no later than 15 days after the date of delivery of the written
notice. As for a residential lease, if the lease called for monthly rent, then
cancellation takes effect thirty days after the next due date for rent following the day
the written notice is sent. For all other property leases, the cancellation is considered
effective at the end of the month following the month in which the written notice is
sent. Any unpaid rent prior to the effective cancellation must be paid to the landlord
on a prorated basis. The servicemember is entitled to a refund of any prepaid rent for
time after the lease is canceled within 30 days of the termination of the 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.²⁷ For motor vehicle leases,
the cancellation is considered effective on the day on which the vehicle is returned
to the lessor. The lessor cannot impose 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 for excessive 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 lease pursuant to this section. Anyone who seizes or otherwise
interferes with the removal of property in order to satisfy a claim for rent due for any
time after the date of the effective cancellation of the lease 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. § 536). If a person entering military service has used
a life insurance policy as collateral to secure a debt, this section protects the
servicemember from foreclosure on the policy to satisfy the debt unless the assignee
first obtains a court order, except in the case that the assignee is the insurance
company itself (in which case the debt amounts to a policy loan). A court may refuse
to grant the order if it determines that the servicemember’s ability to repay is
materially affected by military service. This rule applies during the entire time the
insured is on active duty plus one year. The rule does not apply in three cases: (1)
if the insured gives his or her written permission 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 premiums guaranteed
under title IV of this Act); or (3) if the person whose life is insured has died.

²⁶ See JA-260, supra note 21, at § 4-7.
²⁷ An “equitable offset” may allow the landlord to retain part or all of the amount of rent
remaining on the lease as well as the security deposit, to compensate for unreasonable
expenses incurred as the result of early lease termination. Omega Industries, Inc., v.
Raffaele, 894 F.Supp. 1425 (D. Nev. 1995).

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. § 537). This section protects servicemembers with
property or effects subject to a lien, including liens for storage, repair or cleaning of
property, by providing that no one is allowed to foreclose or enforce lien during the
servicemember’s in military service plus three months unless a court finds that the
servicemember’s ability to meet the obligation is not materially affected by military
service. A court can also stay the proceedings in these types of enforcement actions
or order some other disposition of the case it deems equitable to the parties. This
section does 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 by title 18, U.S.Code, or both.
Dependents’ rights.
Sec. 308 (50 U.S.C. app. § 538). This section extends the benefits of the rules
provided under title III (50 U.S.C. app. §§ 531 to 537) of the SCRA to dependents
of active duty personnel in their own 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 applicant dependents to comply with
the terms of the obligation, contract, lease, or bailment has not been materially
impaired by the military service of the person upon whom the applicants are
dependent.
IV. Life Insurance
Title IV provides relief from insurance premiums and guarantees
servicemembers continued coverage under certain commercial life insurance policies.
Definitions
Sec. 401 (50 U.S.C. app. § 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 policy must be for a whole, endowment, universal, or
term life insurance (other than group term life insurance), or benefit similar to life
insurance that comes from membership in any fraternal or beneficial 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 before the 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 or
policies.
Insurance rights and protections.
Sec. 402 (50 U.S.C. app. § 542). This section further defines who is entitled to
take advantage of the provision and how to apply for protection, and limits total
amount of covered policies to the greater of $250,000, or an amount equal to the
maximum limit of the Servicemember’s Group Life Insurance(SGLI). Either the
person insured, an insured’s legal representative, or, when the insured person is
outside the United States, a beneficiary of the insurance policy must make a written
application to the insurer and send a copy to the Secretary of Veterans Affairs.
Application for insurance protection.
Sec. 403 (50 U.S.C. app. § 543). This section provides that to invoke protection
for the policies under this part of the SCRA the servicemember, his or her legal
representative or beneficiary, must submit an application in writing identifying the
policy and insurer, with an acknowledgment that the insured’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 as
necessary. The insurer then reports the action to the Department of Veterans Affairs
as required by regulation (found in 38 C.F.R. part 7). By making an application for
the protection guaranteed by these sections of the law, the insurer and insured are
deemed to have accepted any necessary modifications to the terms of the life
insurance policy.
Policies entitled to protections.
Sec. 404 (50 U.S.C. app. § 544). The Secretary of Veterans Affairs determines
whether a policy is entitled to the protection guaranteed by these sections, and is
responsible for notifying the insurer and the insured as to his determination. Once

the policy is deemed qualified for protection, the policy will not lapse or be canceled
or forfeited if the insured fails to pay premiums, or pay any debt or interest due on
a policy loan. This protection applies during the time the insured person is in
military service and for two years after he or she leaves military service.
Policy restrictions.
Sec. 405 (50 U.S.C. app. § 545). The approval of the Secretary of Veterans
Affairs is necessary for a policy holder to make certain withdrawals and other
payments or credits under a policy protected by this part of the SCRA. If such
approval is not obtained, rather than paying dividends to the insured or reinvesting
them to purchase additional coverage, the insurer must add dividends to the value of
the policy to be treated as a credit. The insured is not permitted to take out loans
against the policy or cash it in while it is protected without the approval of the
Secretary of Veterans Affairs. However, the insured retains the right to modify the
designation of beneficiaries.
Deductions of unpaid premiums.
Sec. 406 (50 U.S.C. app. § 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 unpaid premiums (plus interest). If the rate of
interest is not specified in the policy, it will be the same rate applied 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 United States.
Sec. 407 (50 U.S.C. app. § 547). This section provides a government guarantee
for premiums and interest that become due on a policy. In the event the insured fails
to pay all of the premiums owed on a policy at the time the guarantee period expires
and the cash surrender value of the policy is less than the amount due, the United
States will pay the unpaid premiums and may then attempt to collect the amount from
the insured. (Any funds collected from the insured are added to appropriations for the
payment of guaranteed premiums under this part of the SCRA). If the unpaid
premiums do not exceed the policy’s cash surrender value, the insurer will treat them
as a policy loan. Moreover, any money paid by the government to an insurance
provider under this section is a debt owed by the insured to the government and may
not be discharged by bankruptcy.
Regulations.
Sec. 408 (50 U.S.C. app. § 548). The Secretary of Veterans Affairs will
promulgate regulations to carry out the provisions of the article.
Review.
Sec. 409 (50 U.S.C. app § 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 by chapter 72 of title 38, U.S. Code.
V. Taxes and Public Lands
The fifth broad category of provisions of the SCRA provides protection for
certain rights regarding public lands and protects servicemembers from having to pay
certain taxes to multiple jurisdictions. It also protects servicemembers from having
certain personal or real property attached in order to satisfy tax liens.
Personal and real property taxes.
Sec. 501 (50 U.S.C. app. § 561). This section applies to all taxes except income
taxes, and it protects 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, as long as the property continues to be
occupied by the servicemember’s family or employees. Property belonging to a
person in military service cannot be sold to collect unpaid taxes unless a court first
gives its permission. A court may stay an action to force the sale of property
belonging to a person in military service for the collection of unpaid taxes if it finds
that the debtor’s ability to pay the taxes is materially affected by his or her military
service. In the event a servicemember’s property is sold for such a purpose, the
servicemember has the right to redeem the property up to six months after the person
leaves military service, without regard to any impairment of the servicemember’s
ability to pay the taxes due to military service. This section will not be construed to
shorten any period provided by state law. Finally, the section provides that a 6%
interest rate will be applied to the 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 servicemember and his or her
dependents.
Rights in public lands.
Sec. 502 (50 U.S.C. app. § 562). Persons in military service cannot be deemed
to have forfeited any right they had to use public lands of the United States prior to
entering military service based on 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 licenses for the duration of
military service plus six months, allowing the servicemember to obtain a reduction
or cancellation of fees for the duration of that time.
Desert-land entries.
Sec. 503 (50 U.S.C. app. § 563). This section protects the rights of persons in
military service who had claims to desert lands prior to entering military service. The
protection lasts while the person is in military service and for six months after he or
she leaves military service or is released from hospitalization because of wounds or
disability suffered while in military service. To qualify for this protection, the

servicemember must give notice of military service to the appropriate land office
within six months after entering military service.
Mining claims.
Sec. 504 (50 U.S.C. app. § 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 or she leaves military service or is released from
hospitalization because of wounds or disability suffered while in military service.
During this time period, the mining claim cannot be forfeited due to nonperformance
of the requirements of the lease. To qualify for this protection, the servicemember
must notify the appropriate claims office that he or she has entered military service
within 60 days after the end of the assessment year in which the person enters
military service.
Mineral permits and leases.
Sec. 505 (50 U.S.C. app. § 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 military service (plus six months), in which case the
period of service is not counted as part of the term of the person’s permit or license
but the holder is not required to pay rentals or royalties during that time. However,
to qualify for these privileges, the person has to notify the Bureau of Land
Management that he or she has entered military service within six months after
entering military service.
Perfection or defense of rights.
Sec. 506 (50 U.S.C. app. § 566). Nothing in title V of the SCRA prevents a
person in military service from taking any action authorized by law or regulations of
the Department of the Interior to assert, perfect, or protect the rights covered in those
sections. A servicemember may submit any evidence required to assert this right in
the form of affidavits or notarized documents. Affidavits provided pursuant to this
section are subject to 18 U.S.C. § 1001.
Distribution of information concerning benefits.
Sec. 507 (50 U.S.C. app. § 567). The Secretary concerned is responsible for
providing military authorities 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. § 568). This section extends the protection of land
rights under this article to servicemembers under the age of 21. Any residency
requirements related to the establishment of a residence within a limited time will be
suspended for 6 months after release from military service.

Regulations.
Sec. 509 (50 U.S.C. app. § 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. § 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 into military 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. No interest or other penalty
may be imposed on a debt deferred under this section. The statute of limitations for
paying the debt is tolled for the length of the person’s period of military service plus
nine months.
Residence for tax purposes.
Sec. 511 (50 U.S.C. app. § 571). In order to prevent multiple state taxation of
the property and income 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 residence for taxation purposes when they serve at
a duty station outside their home state in compliance with military orders. A
servicemember who conducts other business while in military service may be taxed
by the appropriate jurisdiction for resulting income. This section does not protect the
income of a spouse or other military dependant from being taxed. However, a tax
jurisdiction cannot include the military compensation earned by nonresident
servicemembers to compute the tax liability imposed on the non-military income
earned by the servicemember or spouse. Personal property of a servicemember will
not be subject to taxation by a jurisdiction other than his or her domicile or residence
when they serve at a duty station outside of their home state. However, relief from
personal 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 legal residence or domicile is a Federal Indian reservation will
only pay taxes under the laws of the Federal Indian 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 the United States (Sec. 101(6)).
“Taxation” includes licenses, fees, or excises imposed on an automobile that is also
subject to licensing, fees or excise in the servicemember’s state of residence.
“Personal property” includes intangible and tangible property including motor
vehicles.

VI. Administrative Remedies
Title VI provides courts the authority to deny remedies that would abuse the
purpose of the SCRA, 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. § 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 the Act, in order to delay enforcement of the contract, to
obtain reduced interest rates, or to avoid obligations with respect to property that was
the subject of the transaction.
Certification.
Sec. 602 (50 U.S.C. app. § 582). This section provides that a certificate signed
by the Secretary concerned serves as prima facie evidence in an action under the
SCRA that the individual is in the military service, date of induction or discharge,
person’s residence at time of induction, rank and rate of pay, and other facts relevant
to asserting rights under the SCRA. A servicemember who is missing in action is
presumed to continue in military service until he or she is accounted for or his or her
death has been reported to the Department of Defense or determined by a court or
board with the authority to make such determination.
Interlocutory orders.
Sec. 603 (50 U.S.C. app. § 583). This section permits courts to revoke, modify,
or extend any interlocutory orders they has issued pursuant to the SCRA.
VII. Further Relief
Title VII of the SCRA provides a means for servicemembers to petition for
relief without having to wait until a creditor brings an enforcement action against
them. It also treats powers of attorney and provides relief from liability insurance
premiums for servicemembers who need to maintain such policies for their civilian
occupations.
Anticipatory relief.
Sec. 701 (50 U.S.C. app. § 591). This section provides relief similar to that
provided in sections 301 and 501, except that it permits the servicemember to initiate
the action prior to defaulting on the obligation, rather than having to wait for the
creditor to commence proceedings. Dependents do not have independent protection
under this section as they do for the provisions of Article III. A servicemember can
petition the court to stay the enforcement of any pre-service obligation or liability,
including a tax obligation, while on active duty or within six months of release from
active duty.

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 of time 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 remains unpaid
at the termination of the applicant’s military service, in equal installments
over the duration 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 equal installments 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 ability to make payments is materially affected
by military service, to petition the court in effect to rewrite the contract by extending
its life, allowing the servicemember to pay down the amount in arrears with equal
installments over a longer of period of time. The servicemember must resume
making regular payments on the debt after leaving active duty, in addition to the
payments to make up for the smaller payments he or she made while on active duty.
Extension of power of attorney.
Sec. 702 (50 U.S.C. app. § 592). This section provides for the automatic
extension of any valid power of attorney for a person who is declared to be missing
in action. Unless the document explicitly states that it is to expire even in the event
the person who executed it becomes missing in action, 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 as
the servicemember’s attorney in fact.
Professional liability insurance.
Sec. 703 (50 U.S.C. app. § 593). This section provides relief for professional
persons who are required 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 “professional services” and
who had in effect a professional liability (i.e., malpractice) insurance policy, may
suspend payment of premiums on their liability insurance while they serve on active
duty without losing any coverage. The section covers insurance policies that,
according to their terms, would not continue to cover claims arising prior to a lapse
in coverage unless the insured continues to pay premiums.

Definitions.
“Profession” is defined in subsection (i) to include “occupation.” Similarly, the
expression “professional” includes the term “occupational.” Subsection (i) also
defines “active duty,” adopting the definition used in section 101 of title 10, U.S.
Code. However, the provision is further limited to persons called to active duty
(other than for training) under 10 U.S.C. §§ 688 (retired members of regular armed
forces, members of the Retired Reserves, and members of the Fleet Reserve or Fleet
Marine Corps Reserve); 12301(a) (activation of Reserves during war or national
emergency declared by 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 other than 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
Reserve component).
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 policy reinstated. In the case of a joint insurance policy, no
suspension of coverage is required for the policyholders who are not called to active
duty. For example, if several physicians jointly purchase a group policy of
malpractice insurance, and only one of them is called to active duty, the coverage of
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 person chooses, apply the amount toward payment of any
premium that comes due after coverage is reinstated.
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 obligations imposed by state law on a professional person to assure
that his or her patients or clients will receive professional assistance in his or her
absence to serve on active duty, the section clarifies that the failure of the
professional person to satisfy such an obligation will generally be considered to be
a breach that occurred before the professional person began active duty. In such a
situation, the insurer would be liable for the claim. In the event a claim arises while
the patient is receiving alternate care as arranged by the servicemember for patients
during his or her absence, the insurer would not be liable 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 stay only applies where the malpractice is alleged to have
occurred before the suspension began, and would thus be covered by the policy.
Litigation stayed under this rule is deemed to be filed on the date the suspended
insurance is reinstated. The period of any stay granted under this provision is not
counted 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 or administrative action against the person under this section is
lifted. In addition, the insurer providing the coverage that was suspended is to be
liable under the policy just as if the deceased person had died 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 covered servicemember is released from active duty. The
insurer must notify the policy-holder of the due date for payment of any premium
required for reinstatement of the policy, and that the premium must be paid within
30 days after the notice is received by the professional person. The section also limits
the premium that the insurer can charge for reinstated coverage to the rate that would
have applied if the servicemember had not been deployed. The insurer is not allowed
to recoup missing premiums by charging higher rates for reinstated coverage, but it
may charge higher rates for reinstated coverage if it raised the rates for all
policyholders with similar coverage, if the servicemember would have 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. § 594). This section grants servicemembers who were
called to military service as described in § 703(a)(1) the right, upon termination or
release from military service, to reinstatement of any health insurance policy that was
in effect on the day before the servicemember 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 imposed with 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 the condition has not been determined to be a disability incurred in the
line of duty under 38 U.S.C. § 105. The section does not apply to employer-
sponsored health insurance plans covered by the provisions of the Uniformed
Services Employment and Reemployment Rights Act (USERRA).²⁸ Insurance plans
covered by USERRA are subject to similar protections under 38 U.S.C. § 4317.
Servicemembers must apply for reinstatement within 120 days of termination or
release from active duty.

²⁸ P.L. 103-353, 108 Stat. 3161 (1994), codified at 38 U.S.C. §§ 4301 et seq.

Guarantee of residency for military personnel.
Sec. 705 (50 U.S.C. app. § 595). This section guarantees that military personnel
are not deemed to have changed their state residence or domicile for the purpose of
voting for any federal, state, or local office, solely because of their absence from the
respective state in compliance with military or naval orders.
Business or trade obligations.
Sec. 706 (50 U.S.C. app. § 596). The assets of a servicemember are protected
from attachments to satisfy business debts for which the servicemember is personally
liable, as long as the assets sought to be attached are not held in connection with the
business. The obligor would have the right to apply to the court for a modification
of the servicemember’s relief where warranted by equitable considerations.