How to Get Debt Relief During Military Service

By eHow Personal Finance Editor

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Receiving deployment orders is stressful for military families. Add financial worries and the stress level skyrockets. Debt relief to active duty military servicemen and women is offered through the Service Members Civil Relief Act. Follow these steps to find out how to obtain debt relief.

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Instructions

Difficulty: Easy

Things You’ll Need:

Names, numbers and address of lenders

Step1

Recognize who the Service Members Civil Relief Act covers: service personnel on active duty with the Army, Navy, Air Force, Marine Corps, Coast Guard, National Guard, the National Oceanic and Atmospheric Association, commissioned corps of public health services and U.S. citizens serving with armed forces of allied nations.

Step2

Understand what kind of financial relief you can get through the Service Members Civil Relief Act. Lenders are required to reduce interest rates on loans, mortgages, credit cards and auto loans to a rate no higher than 6 percent. Monthly payments also must be reduced.

Step3

Know how to get help. When you are called up to active duty, send a certified letter to your lenders, return receipt requested, explaining how your deployment will affect your income. Include a copy of your deployment orders in the letter.

Step4

Notify the company that carries your life insurance policy. The SCRA states that life insurance cannot lapse, be forfeited or canceled because of non-payment for active duty military.

Step5

Become familiar with how the SCRA affects other civil actions. Service personnel that have been called to active duty may request a delay in bankruptcies, divorces, orders for wage garnishments and foreclosure proceedings.

Tips & Warnings

All requests for debt relief under the SCRA are retroactive.
Make several copies of deployment orders so you have them on hand.
Debt relief under the SCRA is not automatic. You must notify your lenders in writing through certified mail to receive relief benefits.
Don't forget that debt relief does not apply to leases, loans or credit cards you receive after you have been called up to active duty.