Military personnel have the Servicemember’s Civil Relief Act (SCRA) to help protect them when debt becomes troublesome. This act is an improvement from the Soldier’s and Sailor’s Civil Relief Act (SSCRA) which helps a member of the military with debt accrued prior to being in the service. Individuals who are currently enrolled in the service do not always have the time or the resources to effectively plan to relieve themselves of debt.
New debt relief benefits for members who are active in the military are:
Eviction protection for those personnel spending less than $1200 per month on rent.
Those servicemen who will be relocated for more than 90 days have the right to terminate a pending lease.
Credit card interest rates are capped at 6% for active members for current or prior charges. Any obligation over that amount is exempt at the completion of service.
Members of the reserves have better life insurance.
Protects military spouses from paying taxes if they work in a different state than the permanent residency.
Because the military has set protection guidelines from the SCRA, many money options that are used by civilians will not be available to those in the military. The protection from interest rates larger than 6% keeps many credit cards from doing business with them. Applying for a payday loan or an online cash advance will not be fast cash options since their interest rates are much higher than the SCRA allows. The military banks have their own credit cards which give approved options to its members, but these are not included in debt relief programs.
Debt can become a huge problem for military members, many of whom would be omitted from active duty because they are too far in debt. Military members actually lose their security clearances for the significant reason of having too much debt. There are a few reasons as to why this clearance can be revoked.
Military personnel with significant debt are at risk for:
Criminal activity – Opens up questions as to how the individual might take care of debt.
Bribery – The individual is more approachable when desperate for money.
Sell secrets – Possibility to bring in fast cash.
Sell equipment – Possibility to bring in fast cash.
Have lack of focus to duty – Active or non-active duty members with debt problems at home, run the risk of not being fully focused on their duties. This is especially true for active duty members.
A military spouse who goes behind the scenes to obtain an online cash advance could be creating a problem for the military member. This falls true to running up credit card debt as well. The military look down upon its members for carrying too much debt and security clearances are stripped for those who let the debt get out of hand. Debt settlement companies will request a letter of permission from a superior officer before accepting a military member into the program, unless the program is run by a military financial company. These non-military programs will not submit any debt connected to military banks into their programs.
I am a Blogger, Web Content Writer, Teacher, Mom. A woman of many hats. As an elementary teacher, I had always encouraged my students to write more. I find myself falling back on my own teaching techniques to share what I know about building and rebuilding personal finances.