Supposedly, during the Punic Wars, Roman soldiers were away from homes for so long that their family farms went bankrupt and were bought up by the wealthy. Veterans crowding into Rome led to unrest as well as the failed land-reform proposals by Tiberius and Gaius Gracchus. Fortunately, there is a federal law in place to protect armed forces personnel from the kinds of problems the Romans encountered and would normally lead to New York bankruptcy—the Servicemembers Civil Relief Act (SCRA).
The SCRA provides three significant benefits to active duty members of the armed forces or U.S. citizens who are members of allied foreign militaries involved in a military action (“servicemembers”):
(1) Protection against default judgments. If a servicemember is a defendant in a civil action (contract cases, foreclosures, etc.) that results in a default judgment for a creditor, courts must adhere to strict procedures to protect his or her rights, including appointing a lawyer to represent the servicemember before the default judgment can be entered.
(2) Stay of proceedings where servicemembers have notice. Outside of default judgment situations, servicemembers may ask the court to stay civil proceedings against them if they have notice, and the court can enter its own motion to stay the proceedings of its own power. The stay can last at least 90 days, but extensions are possible.
(3) Stay or vacation of judgments, executions, and garnishments. Servicemembers who are unable to comply with a judgment, execution, or garnishment due to military service can have those orders stayed or vacated. The court can take these actions on its own motion as well.
The SCRA also protects servicemembers and their dependents from eviction proceedings, and it provides other protections as well.
The problem of soldiers being unable to maintain their households is not, surprisingly, a problem confined to the distant past. For instance, back in March 2013, The New York Times‘ Dealbook blog reported that several large banks wrongfully foreclosed on servicemembers’ houses in violation of the SCRA.
More information on the SCRA can be found on the U.S. Courts’ Web site.
If you are on active duty for the U.S. military or a foreign allied army, and you are encountering financial difficulties on the home front, the SCRA can help protect you. Once you are discharged, though, the rights don’t last indefinitely, so you will benefit from consulting with an experienced New York bankruptcy lawyer to resolve the problem before it gets worse.
For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced New York Bankruptcy Bruce Weiner for a free initial consultation.