The Servicemembers Civil Relief Act (SCRA) is one of the most valuable — and most underused — protections available to active-duty service members dealing with debt. It doesn’t erase what you owe the way bankruptcy can, but it can freeze lawsuits, cap interest, and stop certain collection actions while you serve. Here’s a plain-English overview.
1. A 6% interest-rate cap on pre-service debt
Under the SCRA, interest above 6% on most obligations you took on before entering active duty can be reduced for the period of your service — and the excess interest is forgiven, not just postponed. You generally must request it in writing with a copy of your orders.
2. A stay (pause) of court proceedings
If military duties keep you from defending a civil lawsuit, the court must grant at least a 90-day stay on request, with more possible at the judge’s discretion. This buys time to respond instead of losing by default.
3. Protection from default judgments
Before a creditor can take a default judgment, they must disclose your military status to the court, and a judgment entered against a deployed service member can be reopened in certain circumstances.
4. Eviction, foreclosure & repossession protections
For covered obligations, the SCRA adds protections against eviction, and against foreclosure or vehicle repossession without a court order during your service.
SCRA vs. bankruptcy — which do you need?
The SCRA holds the line; Chapter 7 or Chapter 13 bankruptcy eliminates or restructures the debt for good. For many service members the strongest approach is both together. We’ll tell you honestly which fits your situation.
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Frequently asked questions
Does the SCRA cancel my debt?
No. The SCRA reduces interest, pauses lawsuits, and blocks certain actions during service, but it does not discharge debt. Bankruptcy is what eliminates or restructures the balances.
Does the 6% cap apply to debt I took on after joining?
No. The 6% interest cap applies to obligations incurred before you entered active duty.
Can I use the SCRA and bankruptcy at the same time?
Yes. Many service members use the SCRA to buy time and reduce costs while bankruptcy resolves the underlying debt.
More on how we help those who serve: Military Bankruptcy and Bankruptcy & Your Security Clearance.
This article is general information, not legal advice, and SCRA provisions can change — confirm current details with counsel or the DOJ Servicemembers Initiative.
