The Servicemembers Civil Relief Act (SCRA) may provide important benefits that can help you. This law protects your financial and legal affairs while you are on active duty military service. Among other things, the SCRA requires your SBA lender to provide you with certain relief from debt that you incurred before entering active duty. It also requires your lender to suspend certain legal actions against you if the action will interfere with your military service.
How the SCRA can affect your SBA loan?
One of the major benefits provided by the SCRA is an interest rate cap. If you are eligible for SCRA benefits, the interest rate on debts you incurred prior to your military service will be reduced to 6% per year and the required payments will also be reduced to reflect this lower interest rate.
How do I know if I am eligible for benefits under the SCRA?
SCRA benefits may be available you if you fall into any one of the following categories:
1. Active duty servicemembers of the Army, Navy, Air Force, Marine Corps or Coast Guard
2. Activated reservists
3. Commissioned officers of the Public Health Service or National Oceanic and Atmospheric Association
4. National Guard members called to active duty for more than 30 days
5. The spouse and dependents of active duty servicemembers
How can I request the interest rate reduction?
An eligible person must do three (3) things to receive the benefits of the SCRA:
1. Show that you incurred the debt before you entered military service;
2. Request your SCRA benefits within 180 days of the end of your active duty; and
3. Provide your Lender/SBA a copy of your active duty orders or a letter from your commanding officer on his or her letterhead.
You mentioned a letter, what should I include in it?
Your letter should contain the following six (6) key pieces of information to establish your eligibility:
1. Your full name;
2. Social security number;
3. Date of birth;
4. Home address;
5. Active duty start date;
6. Commanding officer’s telephone number, unit number, and statement confirming your active duty status.
How long will my interest rate reduction last?
The interest rate reductions on your SBA loan will expire 6 months after you complete your military service.
If you have futher questions about the SCRA or how SCRA benefits may affect your SBA loan or your spouses SBA loan, please contact the SBA loan default attorneys at the Perliski Law Group at (214) 446-3934 for a free initial consultation.