As the nation prepares for war with Iraq, thousands of military personnel are being called to active duty, making them eligible for debt relief under a World War II-era law known as the Soldiers and Sailors Credit Relief Act. The protection applies to debt of all kinds -- including auto loans, credit cards and mortgages.

The law provides that when you are called to active duty, your lenders are required by law to immediately reduce the interest rate on your loan to 6 percent. You must, of course, notify the lender in writing. The letter must be sent by certified mail, return receipt requested, and should include a copy of your mobilization orders. Be sure to provide your full name and account number.

Your letter should also include a brief description of why your income has been significantly reduced by the call-up.

The lender is required by law to immediately comply with your request. The law provides that benefits must be retroactive. In other words, if you were called up in December 2002 and you notify your lenders in February 2003, they must credit you for payments you made in December and January at a higher rate.

Also, the reduction in the interest rate must by accompanied by a reduction in your monthly payment. The lender can't require you to make the same monthly payment and simply apply more of the payment to principal.

Note: the law applies only to debts incurred prior to reporting for active duty. If you buy a car while on leave, the law does not apply.


There are also special protections for leases and rentals. If you entered into a lease before being called into active duty, you may terminate the lease before to its expiration. You must give 30 days notice and the rent must be paid up when the lease is terminated.

As for evictions, if you or your dependants fall behind in lease or rent payments, you cannot be evicted without a court order. Only a court can order the eviction of military personnel and their dependants. You will have to satisfy the judge that military service has affected your ability to pay. The court may then order the eviction delayed for up to three months.

Other Issues

Private life insurance policies cannot lapse, terminate or be forfeited for nonpayment while you are on active duty -- and for two years thereafter.

Garnishments, attachments A court may stay or vacate any attachments or garnishments against active duty military personnel during the period of active duty and for 60 days after the active duty ends.

Other court actions If you are involved in other legal matters -- including divorce, bankruptcy and foreclosure -- you may request a delay until you have been released from active duty.

The statute of limitations is automatically extended to account for any delays you may be granted.

Legal Assistance

If you have any difficulties, questions or concerns about any of the matters mentioned above, you should consult with the legal assistance attorney assigned to your unit. Every unit has such an officer assigned to it.

By the way, these protections apply not only to units of the Army, Navy, Air Force and Marines but also to the Coast Guard, National Oceanic and Atmospheric Administration and officers of the Public Health Service.