Servicemembers who are serving in the military can sometimes find themselves in financial trouble and facing foreclosure. This may apply to servicemembers who are recalled to active duty or who are about to go on long term deployment and expect to have trouble meeting their financial obligations. Fortunately, these servicemembers have protections from foreclosure under the Servicemembers Civil Relief Act.

Under the Act, servicemembers of any branch of the military who are on active duty are offered several means of relief from debt during their active duty time. For instance, servicemembers are allowed to cap the interest rates on loans to 6%. This includes capping or reducing interest rates on credit cards, car loans, and mortgages. The only exception is that the loan whose interest is capped has to have been secured before the servicemember was called to active duty. The protections apply during a servicemember’s period of active duty and for a period of time after the period of active duty ends.

For mortgages, servicemembers receive protection from foreclosure action taken during the period of deployment. Furthermore, foreclosure cannot be completed without a court order if the homeowner is on active duty. This is important for homeowners in Michigan, who would ordinarily be facing non judicial foreclosure like all other homeowners in Michigan. Servicemembers can also seek protection by stalling a foreclosure action for a period of time.

Even under Michigan’s non judicial foreclosure, a lender has to provide notice to a homeowner before foreclosing on the homeowner’s home. Once the spouse of a servicemember on active duty receives this notice, he or she can contact the servicemember in order to assert the protections of the Servicemembers Civil Relief Act.

Servicemembers can waive their rights under the Servicemembers Civil Relief Act after or during their period of active duty. Waivers executed before active duty deployment are invalid. All waivers are also required to be in writing in order to be considered valid. Servicemembers should ensure that they read all paperwork when taking on a loan in order to ensure that the paperwork does not include a waiver of the protections under the Act.

Servicemembers who want to take advantage of the protections offered under the Servicemembers Civil Relief Act have to make a request for relief. The provisions are not automatic. However, once the servicemembers make the request and get the relief they need, it can help them avoid financial and legal issues such as foreclosure for a while. The affected servicemember can take the time to organize his or her financials and hopefully be able to recover once the period of protection is over.

Contact Us for Legal Assistance

For more information about how you can seek relief under the Servicemembers Civil Relief Act, or by other means to avoid or defend yourself against foreclosure, you need to schedule an appointment with an experienced foreclosure attorney. Call us at Resnick Law, P.C., in Bloomfield Hills and Detroit, Michigan. Our experienced attorneys can guide you through possible defenses and different alternatives to avoid foreclosure.

(image courtesy of Israel Palacio)