Bankruptcy and the Servicemembers’ Civil Relief Act (SCRA)

bankruptcy and civil service members actThe financial issues that lead to bankruptcy are not restricted to civilians. Many of our nation’s service members are struggling with debt problems, too. For members of the military based in Arizona, attorney (bankruptcy) Lawrence ‘D’ Pew explains how the Servicemembers’ Civil Relief Act (SCRA) provides additional protections against civil lawsuits from creditors. The SCRA prevents a creditor from receiving a default judgment against a service member who is deployed and unable to respond to a civil action or unable to appear and defend at trial. The SCRA applies to every service member on active duty, to active-duty reservists, to those preparing to report for active duty, and to certain citizens involved in U.S. military action. At the Pew Law Center, your Arizona attorney (bankruptcy advocate) will seek enforcement of every provision under the SCRA to protect the military debtor.

Bankruptcy May Be Avoided When Lawsuits Are Stayed

The Servicemembers’ Civil Relief Act (SCRA) stays certain lawsuits against members of the armed forces. The purpose of the SCRA is twofold:

•  To improve our country’s defense by keeping service members focused on their military duties.

•  To protect service members from lawsuits and administrative proceedings that could adversely impact their civil rights by suspending those actions while they are on active duty.

Bankruptcy Proceedings Affected in 3 Ways By SCRA

The SCRA protects service members from the actions of creditors in three ways:

1. Protection from the entry of default judgments when the debtor had notice of the action.

This is what the Pew Law Center’s Arizona attorney (bankruptcy representation for military service members) will advise. If the defendant-debtor does not appear and defend, and the plaintiff-creditor seeks a default judgment, then the creditor must provide a sworn affidavit as to debtor’s military status. If the creditor has no knowledge of military service, then the court may require a bond to indemnify the debtor for any damage or loss resulting from the default judgment. If the debtor is active duty military, then an attorney must be appointed to represent that debtor prior to any default judgment. After a judgment is entered, a service member may still request that the case be reopened if his or her rights were prejudiced as a result of military service.

2. Stayed civil proceedings when the debtor had notice of the action.

The military debtor can ask the court to stay, or suspend, proceedings for 90 days, and for additional periods at the court’s discretion. All that is required is a letter from the debtor’s commanding officer and a letter from the debtor describing the military duty performed. Your Arizona Bankruptcy Attorney will advocate that all civil lawsuits to collect on a debt be halted during military service.

3. Stayed execution on judgments, garnishments, and attachments.

This means that a creditor with a judgment will likely be ordered to cease such collection actions for the time the debtor is in the service plus another 90 days after discharge from the military. The Pew Law Center’s Arizona attorney (bankruptcy filings under Chapter 7, 11, or 13) will advise on reopening a default judgment rendered during the client’s military duty.

Bankruptcy Proceedings Fall within the SCRA

This is what our Mesa, Arizona bankruptcy attorney (bankruptcy as affected by the SCRA) wants you to know. Because the SCRA protects service members from default judgments while on active duty and 90 days after discharge, a written affidavit signed by the creditor must be filed with the bankruptcy court clerk. This certification must state whether the debtor is or is not in the military before any default judgment will be entered by the bankruptcy court. When the debtor is on active duty, or recently discharged from active duty, then the SCRA protections apply to protect his or her legal rights in civil actions at home.

bankruptcy and scraBankruptcy Representation for Service Members.  If you or your loved one is serving in the military, then call 480-745-1770 today and schedule a FREE VIP Bankruptcy Consultation with Arizona attorney/bankruptcy counselor Lawrence ‘D’ Pew to discuss service member protections under the SCRA.