SCRA & Financial Protections: Know Your Rights Before You Deploy

What Is the SCRA?

The Servicemembers Civil Relief Act (SCRA) is a federal law that protects active-duty service members from certain financial and legal obligations that could become unmanageable during deployment or other periods of active duty. It applies to members of the Army, Navy, Marine Corps, Air Force, Space Force, Coast Guard, and activated National Guard and Reserve units.

SCRA protections generally apply to obligations you took on before your current period of active duty — loans, leases, and contracts you entered before your orders began. The law recognizes that active duty can make it impossible to manage these obligations normally, and it creates a legal framework to protect you.

The 6% Interest Rate Cap

This is the most financially significant SCRA protection for most service members. Under the SCRA, lenders must reduce the interest rate on pre-service debts to no more than 6% per year while you are on active duty — and they must forgive (not defer) the interest above 6%. That excess interest is gone, not added back to your balance when you return.

This cap applies to almost every type of consumer debt: mortgage loans, car loans, credit cards, student loans, and personal loans — as long as the debt was incurred before your active duty began. On a credit card charging 22% APR, the cap saves you 16 percentage points for every month of active duty.

To invoke the cap, send a written request to each lender along with a copy of your military orders. Do this before you deploy. Lenders have 30 days to comply once they receive your written request. If a lender refuses or fails to respond, contact your installation's Judge Advocate General (JAG) office.

Protection from Eviction

A landlord cannot evict a service member or their dependents from a primary residence without a court order while the service member is on active duty, provided the rent does not exceed a threshold set by Congress (adjusted periodically — approximately $4,900/month as of 2026). The court must consider whether the military service materially affected the service member's ability to pay, and can delay the eviction for up to 90 days.

This protection applies whether you are the tenant or your family is living in the home while you are deployed. Your dependents are covered, not just you.

Lease Termination Rights

If you signed a housing lease before being called to active duty, or if you receive deployment or Permanent Change of Station (PCS) orders during your service, you have the right to terminate the lease without penalty. The same applies to vehicle leases.

For housing leases, deliver written notice of termination plus a copy of your orders to your landlord. Termination is effective 30 days after the next rental payment is due. For month-to-month leases, that typically means one more month of rent. For longer-term leases, the same 30-day period applies regardless of what the lease says about early termination fees.

For vehicle leases, the process is similar — written notice plus orders — and termination is effective 15 days after the lessor receives notice.

Foreclosure Protection

For mortgages originated before active duty began, a lender cannot foreclose on your home during active duty without first obtaining a court order. The court must consider the effect of military service before allowing foreclosure to proceed, and can delay proceedings or adjust your obligations.

This applies even if you are behind on payments. It does not make the missed payments disappear — but it gives you legal protection and time to address the situation. If you receive a foreclosure notice while on active duty, contact your JAG office immediately.

Civil Court Protections

If you are involved in a civil court case — a lawsuit, a debt collection case, a custody matter — and your military service prevents you from appearing or participating, you can request a stay (a delay) of the proceedings. The court must grant at least a 90-day stay when requested, and may grant longer delays.

If a default judgment was entered against you in a civil case while you were on active duty and unable to appear, you can petition the court to reopen the case within 90 days of your discharge or release from active duty. The court may set aside the judgment if your service materially affected your ability to defend yourself.

How to Invoke Your SCRA Rights

The process is straightforward for most protections:

1. Get a copy of your orders. You'll need these for every request.
2. Write to each creditor or landlord. A simple letter stating you are invoking your SCRA rights, your active duty start date, and your unit is sufficient.
3. Include a copy of your orders. Attach a copy (not originals) with each request.
4. Send with proof of delivery. Certified mail or another trackable method creates a paper trail.
5. Follow up. Lenders must comply within 30 days of receiving your request for the interest rate cap. Keep documentation of all responses.

If a creditor refuses to comply or retaliates, that is a violation of federal law. Contact your installation's JAG office or the Department of Defense's SCRA website at servicemembers.gov, which also provides a database lenders can use to verify active-duty status.

What SCRA Doesn't Cover

SCRA has limits worth knowing. It generally does not apply to debts incurred after your active duty began — only pre-service obligations. It does not forgive debt, only reduce the interest rate and provide legal protections. It does not prevent negative credit reporting for late payments (though the interest cap should make payments more manageable). And it does not apply in all situations automatically — most protections require you to formally invoke them.

For debts incurred during active duty, other programs such as the Military Lending Act (MLA) apply — that law separately caps interest at 36% MAPR for active-duty borrowers taking out new loans during service.

Before You Deploy: A Note for TVACU Members

The best time to set up SCRA protections is before your deployment or activation begins, not after. Once you're deployed, coordinating paperwork across time zones becomes significantly harder.

If you are a TVACU member receiving deployment or activation orders, contact us directly. We can review every account you hold with us, apply the 6% interest rate cap to eligible loans immediately, and discuss arrangements that make sense while you're serving. Credit unions were built around community trust — honoring SCRA protections is something we take seriously.