Summary Of Key Statutory Provisions Affecting Servicemembers And Veterans

 

FEDERAL

STATE

 

Servicemembers Civil Relief Act ("SCRA") (50 U.S.C.A. §§ 3901-4043)

NYS Soldiers' and Sailors' Civil Relief Act (NY Military Law §§ 300-328)

 

Interest Rate Cap

Interest rate on mortgage payments, credit cards, and other obligations incurred before military service may be capped at 6% (if service materially affects the member's ability to pay).

  • For mortgages, this cap remains in effect during the period of military service and one year thereafter.
  • For other obligations, the cap remains in effect during the period of military service.

(§ 3937).

Interest rate on consumer credit transactions incurred while on active duty capped at 36% effective October 3, 2016.  Credit card companies required to comply by October 3, 2017. (Military Lending Act)

During military service, interest on obligation or liability incurred before service capped at 6%. (§323-a).

Foreclosure

Mortgage lenders may not foreclose, or seize property for failure to pay a debt, while a service member is on active duty or for one year after active duty unless they have the approval of a court.          (§ 3953).

 

With respect to property owned prior to commencement of military service, court may stay proceedings to enforce obligations for non-payment. No sale, foreclosure, or seizure of property for non-payment shall be valid during period of military service or six months after, unless upon court order. (§ 312).

Residential and Other Leases/Eviction

After executing a lease, a person who enters military service or a servicemember who receives permanent change of station orders or who is deployed to a new location for 90 days or more have the right to terminate a lease for residential, professional, business, agricultural or similar purpose upon written notice to the landlord.

Termination is effective 30 days after the next rental payment is due (if lease provides for monthly payment of rent) or the last day of the month following the month in which notice is given.

May not evict service member or family for nonpayment of rent from home occupied as primary residence when the rent does not exceed a certain amount adjusted annually, except by court order.

(§§ 3951, 3955).

After military service begins, allows for termination of a lease upon proper notice, effective thirty days after next rental payment due or last day of the following month (depending on the type of lease). (§ 310).

No eviction during period of military service except upon leave of court. (§309).

Motor Vehicle Lease Contracts

Automobile leases may be terminated when a service member receives permanent change of station orders or is deployed to a new location for 180 days or more.

Termination is effective when the vehicle is returned, not later than 15 days after delivery of written notice to lessor of termination. (§ 3955).

 

After military service begins, lease can be terminated upon notice and effective 30 days after first date on which next lease payment is due and payable after notice delivered, or the vehicle is returned to the lessor, whichever is later. (§311-a).

Telephone Contracts

Telephone contracts, including contracts for cellular telephone service, may be terminated via written or electronic notice when a servicemember is ordered to relocate for 90 days or more to a location that does not support the contract.
(§ 3956).

Contracts from telecommunications, internet and television providers may be terminated without penalty when written notice made to provider within 14 days of receiving orders to report to military service.          (§ 311-c).

Installment
Contracts

A contract by a service
member for the purchase of real or personal property, including a car, or the lease or bailment of such property may not be rescinded or terminated for breach of contract occurring before or during military service, and such property may not be repossessed without a court order. (§ 3952).

After military service begins,
cannot exercise right or option to rescind or terminate contract or resume possession of property for nonpayment of any installment or for breach of the terms occurring prior to or during military service, except through court action. (§ 311).

Other rental contracts

 

After military service begins, servicemember entitled to, upon meeting certain notice requirements, cancel contract at no penalty and with full refund of any moneys placed on deposit.    (§ 311-b).

Life Insurance

A service member may have the Dept. of Veteran Affairs guarantee payment on certain types of commercial life insurance policies for the period of military service and for two years after that.
(§§ 3971-79 ).

No life insurance policy of a member of a reserve component of the armed forces who is called to active duty, or policy which has been brought w/I the benefits of the federal SSCRA, shall lapse or be forfeited for nonpayment of premium during period of service, or during two years after expiration of that period; also addresses individual accident and health insurance policies for members of state organized militia. (§ 316); Protection for assignor of life insurance policy. (§316-a).

Health Insurance

Servicemembers are entitled to have their civilian health insurance reinstated when they return to civilian life following periods of active duty. (§ 4024).

No individual accident and health insurance policy which insures a member of the organized militia of the state shall lapse or be forfeited for
non-payment during period of 60 days from date that member begins active duty if appropriate notice furnished. (§ 316).

Contract Penalties

If a service member fails to perform an obligation arising under a contract and a penalty is incurred arising from that nonperformance, a court may reduce or waive the fine or penalty if (1) the service member was in military service at the time the fine or penalty was incurred; and (2) the ability of the service member to perform the obligation was materially affected by such military service.
(§ 3933).

When action for contract compliance stayed, no fine or penalty shall accrue for failure to comply with contract during period of stay. (§305).

Impact on Certain Future Financial Transactions

Application pursuant to this statute for stay, postponement or suspension of                 tax, fine, penalty, insurance premium or other civil obligation alone shall not provide basis for: determination that person unable to pay; denial or revocation of credit, change of terms of existing credit arrangement, refusal by creditor to grant credit in substantially same amount/terms; adverse credit report; change in insurance terms. (§ 3919).

Application pursuant to this statute for stay, postponement or suspension of tax, fine, penalty, insurance premium or other civil obligation or liability alone shall not provide basis for: determination that person unable to pay; denial or revocation of credit, change of terms of existing credit arrangement, refusal by creditor to grant credit in substantially same amount/terms; adverse credit report; refusal to insure.               (§ 313-a).

Storage Liens

Without a court order, a person holding a lien on the property or effects of a service member may not, during any period of military service and for 90 days thereafter, foreclose or enforce any lien on such property or effects.
(§ 3958).

No person shall exercise any right to foreclose or enforce any lien for storage of household goods, furniture, or personal effects of a person in military service during such person's period of military service and for three months thereafter except upon court order. (§316-a).