Contemporary Applications of the Soidiers' and Sailors Civil Relief Act

• Author: by Major James P. Pattorff
• Pages: 06

"Obscure Law That Gives Gls a Break

On Rates Stirs Concern Among Banks'

1. INTRODUCTION

   As this recent headline from the WallStreet JounaP suggests, the Soldiers' and Sadon' CiT il Relief Act2 (SSCRA) introduced numerous issues and challenges for crediton and legal assistance attorneys during Operations Desert Shield and Desert Storm. A significant number of these issues inroired the application of the SSCRA to various financial obligations of military members. Contrary to the Journal's assertion, howerer, m military mdes the SSCRA IS neither obscure nor intended to provide "breaks" for service members Instead, as this article will describe, the SSCRA is intended to counteract the adverse effects of miiitary serv~ce.

   Because Desert Shield and Desert

   Storm deployments exceeded m m e and scope any deployment since the Vietnam War, many of the questions raised had not been analyzed in almost twenty years, othen were issues of first impression Pres,-dential activation of tens of thousands of Reserve component service members brought into focus for crediton and debtors alike several pravislons of the SSCRA dealing with financial liabilities of service members.

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   Thls article3 will discuss application of the bSCR.4 IO problems ser-vice members face during a major deployment and will nnalyw re-cent amendments designed to provide improved protectmn Spew firally. the article will discuss the purpose of the SSCRA, eliglblllty for SSCRA cwerage. stays of proceedings. termination of leases of premises. protectLon from emction termination of automobile leases. mortgage foreclosure. interest rate Iinutationr, retaliation for mocation of the SSCRA. payment of alimong and child support. powers of attornei. and insurance protection of prafesaonals

   11. PURPOSE

   Enacted m 1040. and amended periodically over the last flit) gears4 the SSCRA protects rhose nho wive their country in the armed forces. The premise underlying the SSCRA E that bernce members should not be disadvantaged either iegallg or financially when called to actn e %errice

   j

   It reflects congressional efforts to gne meaning and substance to that premise through legislation addressing a aide spectrum of issues and problems

   As a general rule, courts interpreting the SSCRA ha, e been liberal in applying its pmtectmns to serv~ce members Actuail?. any case in ahich m h t q sen ~ c e materialli affects a sen ice member's ability to meet financial or legal obligations mag be open to corrective ac. tion under The SSCRA.' While the SSCRA 1s the result of congressional efforts to avoid the adverse effects of sernce. 11 does not address explicitly all such problems Although financial agreements such as mortgages installment contracts.@ and other interest bear

   %nr of rhir artirle are based on r

   Sailor3 Ciiii Relief

   19911 COKTEMPORARY APPLICATIONS OF SSCRA

   ~ n g obligationi1° receive treatment under the SSCRA. other abligations, such as chlid and spousal support. do not

   When no provision of the SSCRA applies to a specific problem, other. more broadly worded, provisions may be helpful. In this respect. section 610 of title 60, United States Code Appendu. LS particularly useful. Section 510 states that the purpose of the SSCRA

   1s to suspend legal proceedings and transactions "in order to enable [military service members] to devote their entire energy to the defense needs of the Katmn In a judicial endorsement of this policg. the Supreme Court has stated that the SSCRA should be ~ n - terpreted "with an eye fnendly to those who dropped thew affairsto answer their country'ŝall."~~Thisstatement also reflects the approach most courts take, particularly when the person seeking reliefis an activated member of the Reserve components.13 As this article will discuss, applicabihty of these provisions- such as section 5lO-to many contemporary issues has not been established by judiaal interpretation or legislatire change In these cases. when no specific provision of the SSCRA applies, a policy-based argument may be useful

   111. ELIGIBILITY FOR SSCRA COVERAGE A. SERVICE MEMBERS

   As a general rule. the SSCRA applies to ''pemms m the mllitary Service"L4 The SSCRA defines "military s ~ T P ~ ' ' as "Federal ~er-vice an active duty with any branch of serwce. "lb Under the SSCRA. "persons" in mihtary service are members of the Arm) of the United States, the United States Navy, the Manne Corps. the Air Force.LB the Coast Guard, and officers of the Public Health Service detailed for duty with the Army or the Kavy"

   'Old 5 626

   'Id

   "Lp .lfnislrr 733 US at 6 (SSCRA tolls statute of Ihmrafloni. therebi exrending ' s S ~ ~

   JA 260, para 1-5 'l50 I SC app 8 511

   state staturov redemprian period)

   .-,a

   "Technical amendments m IYQ1 added rhe Air Farce ro those explicitly receiring protecnons under the SSCRA SSCRA Amendments of 1881, 68 Other vrotectionr in

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   Although the SSCRA does not define the composition of each of the armed ben~cer.other federal %atUtes ~n title IO. United State' Code. gne helpful The .Arm) of the United States includes the Regular .Arm), the Army Katmnal Guard of the lnited Statea the Army Yational Guard ii hile 111 8en ice ai the United States. the Arm> Reserve, and all persons dppomted. rnlisred or conscripted nithout component Ip Similarly. the Air Force iniludei the Regular Air Force, the Ax Sarional Guard of the United States. the Air Sa-tiondl Guard II hile m rhe service of the United States. the Air Force Reserie those nithout component. and all other units and individuals !< hc form the basis for complete mobilization for nationaldefense in rhe event of a national emergenu1 j'' The L-mtrd State5 Sa\> includes the Regular Na\>. the Fleet Resene and the Kaial Reserie 21 The \lame Corps includes the Regular hlarine Cxpa. the Fleet SIarme Corps Reserie and the \larim Corps Reserve \lembers of the Coast Guard include the Regular Coast Guard and the Coast Guard Resene.'- hhether actwall? operating with the N a ~ i ornirh the Department of Trdniportatiun." Consequentli Re5erie componenr benice members on active federal dut? are eligible for thr proreitions afforded b? the SSCRA hither, rhe SSCRA makes no distinction tietaren those who volunteer for actiie *enlie and those who ~n\oluntaril>are called to actlie dut) from the Reierir componrnti

   Application of the SSCRA during mobilizations wch ai Operatimi Deserr Shield and De5ert Storm demonarrates how 11s protcct1on3 while not alra?s aiailable to career statu5 service member,. clearl? appl? to persons entering artire service Many provisions of the SSCRA iuch as those protecting against mortgage foreclowre.'5 Imuting maximum Interest rateb,2" and allowng termination of leaws,z7 require that ~ e r i

   I C ~

   members hare obligarioni that predate their active service Consequentl) the maJorlt) of the protections proiided by the SSCRA nrdinaril, are unavailable to career 3e1v1ce e these indniduals routinel) enter Into iuch legal

   19911 COKTEMPORARY APPLICATIONS OF SSCRA

   2. PERSONS NOT IN MILITARY SERVICE

   In addition to military members, the SSCRA may protect others. This protection for others has two forms. It may be derivative protection only, as described in section 513,25or it may include protection of dependents in their awn right, as found m section 636

   The first type of protection-third party or derivative protection-extends to "sureties. guaranton, endonen, accommodation maken, and others, whether primarily or secondarily subject to [an] obiigatmn or hability. ''30 This protection is kited to those persons who have joint liability on an obligation with another penon who subsequently has entered military service Under section 513, these persons receive the protection of any provision m the SSCRA that might "stay, postpane, or suspend'' an obligation or habil~ty.~~

   Although

   section 513 does not Contain the term "comaker," legislative history indicates that Congress intended to protect comakers as weil. Congress amended this provision in 1942 and added "accommodation makers" to those receiving protect~ons.~~

   According to testimony in the House of Representatives, some interpretations of the onginai SSCRA were excluding comaken. and Congress intended to correct

   Further, Cong?ess also protected the banking and credit industry by including a provision that allows comakers to waive their protection under section 613.34 Such a waiver by a comaker empowen a creditor to seek continued payment from that comaker when another comaker enters military service and is eligible for protection under the SSCRA

   Provisions that "stay, postpone, or suspend' an obhganon mclude, but are not llmited to. those that stay htigatian,gs protect agamst mortgage foreclosure,38 and protect against installment contract teminat i ~ n . ~ '

   Arguably, section 526, which limits mterest payments under certain circumstances. also IS a provision that "suspends" an obhga- '#id 5 613 (pmfecuon of penanr secandanly Ihable) '#Id 5 536 [eitensmn oi benefits le dependents)

   4 613d'ld'"88 Cow Rec 5366 68 (19421 (ferfmony of Represenrall\e Kildw, Texas)*'Id see, eg In m ItzkoULfZ 177 Misc 269. 30 NYS 26 336 (NY Sup Ct 1941) laccornmodation comaker of note rimed with nemm now 10 mllnen, service u,es not entitled to stay of enioicemenl oiiiabilitrl .

   "50 usc app 5 513(4)

   Wee eg , U'hlfe System of Lafa?ette 7 Flrher, 16 So 2d 88 (La 1943) (accommoda- "50 0 S C app 5 532 *'Id 5 531

   tlOn maken on mllitaw member I note receired stlay as persons secondarily Uablel

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   tion If a person meets the Criteria set out in section 513. that per son shouid receive the benefit of the appropriate stay provision in the same manner as the serv-lce member

   The second type of protection. unlike section 513, affords independent protection Pnder section 536, a service member does nor hare to be obligated for dependents to assert some rights under the SSCRA.'a This provision IS limited. however, to the protections...