San Diego, CA - What happens when a member of the military, who just leased a new vehicle, and shortly thereafter gets a deployment order for outside of the United States. The average consumer might be stuck, however under this law, service members would be allowed to cancel the lease if their deployment is 180 days or more.
Congress recently updated and passed the Soldiers and Sailor s Relief Act, which is now known as the Service Member s Civil Relief Act. It has created special relief for service members deployed overseas, especially in the area of vehicle leases and capping interest rates on other loans to six percent per year during periods of military service. One reason for an update of the legislation existing since World War I is that there was no such thing as a motor vehicle lease in the early 1900s.
Overall, the legislation is designed to help ease the legal and economic burdens on military personnel called to active duty overseas. Congressman Bob Simmons, a cosponsor of the law then known as HR100 said This bill gives temporary financial and civil relief to the brave men and women fighting the front lines of terrorism. Often times being deployed equates with taking a pay cut and having the entire family make sacrifices for the sake of our nation's welfare. The Service Members Civil Relief Act is Congress' effort to ease further stresses on these patriotic families."
To protect their rights H.R. 100 will provide service members with automatic 90-day stays in civil proceedings. Furthermore, if an additional stay is subsequently requested but denied, the court will be required to appoint a counsel to protect the service member's rights while he remains on active duty. The Service Member s Civil Relief Act will also:
Expand current law that protects service members and their families from eviction from housing while on active duty due to nonpayment of rents that are $1,200 per month or less. Under the new provisions this protection would be significantly updated to meet today's higher cost of living - covering housing leases up to $2,400 per month - and then be adjusted annually to account for inflation.
Provide a service member who receives permanent change of station orders or who is deployed to a new location for 90 days or more the right to terminate a housing lease.
Clarify and restate existing law that limits to 6 percent interest on credit obligations, including credit card debt, for active duty service members. HR 100 unambiguously states that no interest above 6 percent can accrue for credit obligations while on active duty, nor can that excess interest become due once the service member leaves active duty - instead that portion above 6 percent is permanently forgiven. Furthermore, the monthly payment must be reduced by the amount of interest saved during the covered period.
Update life insurance protections provided to activated Guard and reserve members by increasing from $10,000 to $250,000 the maximum policy coverage that the federal government will protect from default for nonpayment while on active duty.
Prevent service members from a form of double taxation that can occur when they have a spouse who works and is taxed in a state other than the state in which they maintain their permanent legal residence. HR 100 will prevent states from using the income earned by a service member in determining the spouse's tax rate when they do not maintain their permanent legal residence in that state.