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SCRA. Servicemembers' Civil Relief Act
The Servicemembers' Civil Relief Act applies in bankruptcy cases. It provides protection
to members of the military against the entry of default judgments and gives the court the
ability to stay proceedings against military debtors.
a. General Provisions
b. Applicability to Bankruptcy Proceedings
________________________________________
Background
The Servicemembers' Civil Relief Act ("SCRA") is found at 50 U.S.C. app. §§ 501 et seq.
The purpose of the SCRA is strengthen and expedite national defense by giving
servicemembers certain protections in civil actions. By providing for the temporary
suspension of judicial and administrative proceedings and transactions that may
adversely affect servicemembers during their military service, the SCRA enables
servicemembers to focus their energy on the defense of the United States. Among other
things, the SCRA allows for forbearance and reduced interest on certain obligations
incurred prior to military service, and it restricts default judgments against
servicemembers and rental evictions of servicemembers and all their dependents. The
SCRA applies to all members of the United States military on active duty, and to U.S.
citizens serving in the military of United States allies in the prosecution of a war or
military action. The provisions of the SCRA generally end when a servicemember is
discharged from active duty or within 90 days of discharge, or when the servicemember
dies. Portions of the SCRA also apply to reservists and inductees who have received
orders but not yet reported to active duty or induction into the military service.
General Provisions
There are three primary areas of coverage under the SCRA: (1) protection against the
entry of default judgments; (2) stay of proceedings where the servicemember has notice
of the proceeding; and (3) stay or vacation of execution of judgments, attachments and
garnishments. 50 U.S.C. app. §§ 521, 522 and 524.
Protection Against Default Judgements
Section 521 of the SCRA establishes certain procedures that must be followed in all
civil proceedings in order to protect servicemember defendants against the entry of
default judgements. These procedures are outlined below:
• If a defendant is in default for failure to appear in the action filed by the plaintiff, the
plaintiff must file an affidavit (1) with the court before a default judgment may be entered.
The affidavit must state whether the defendant is in the military, or that the plaintiff was
unable to determine whether the defendant is in the military.
• If, based on the filed affidavits, the court cannot determine whether the defendant
is in the military, it may condition entry of judgment against the defendant upon the
plaintiff's filing of a bond. The bond would indemnify the defendant against any loss or
damage incurred because of the judgment if the judgment is later set aside in whole or
in part.
• The court may not order entry of judgment against the defendant if the defendant is
in the military until after the court appoints an attorney to represent the defendant.
• If requested by counsel for a servicemember defendant, or upon the court's own
motion, the court will grant a stay of proceedings for no less than 90 days if it
determines that (1) there may be a defense and the defense cannot be presented
without the defendant's presence; or (2) after due diligence the defendant's attorney has
not been able to contact the defendant or otherwise determine if a meritorious defense
exists.
• The court may, in its discretion, make further orders or enter further judgments to
protect the rights of the defendant under the SCRA.
• If a judgment is entered against the defendant while he or she is in military service
or within 60 days of discharge from military service, and the defendant was prejudiced
in making his or her defense because of his or her military service, the judgment may,
upon application by the defendant, be opened by the court and the defendant may then
provide a defense. Before the judgment may be opened, however, the defendant must
show that he or she has a meritorious or legal defense to some or all of the action.
Stay of Proceedings Where Servicemember Has Notice
Outside the default context, and at any time before final judgement in a civil action, a
person covered by the SCRA who has received notice of a proceeding may ask the court
to stay the proceeding. 50 U.S.C. app. § 522. The court may also order a stay on its own
motion. Id. The court will grant the servicemember's stay application and will stay the
proceeding for at least 90 days if the application includes: (1) a letter or other
communication setting forth facts demonstrating that the individual's current military
duty requirements materially affect the servicemember's ability to appear along with a
date when the servicemember will be able to appear; and (2) a letter or other
communication from the servicemember's commanding officer stating that the
servicemember's current military duty prevents his or her appearance and that military
leave is not authorized for the servicemember at the time of the letter. The court has
discretion to grant additional stays upon further application.
Stay or Vacation of Execution of Judgements, Attachments and Garnishments
In addition to the court's ability to regulate default judgments and stay proceedings, the
court may on its own motion and must upon application: (1) stay the execution of any
judgment or order entered against a servicemember; and (2) vacate or stay any
attachment or garnishment of the servicemember's property or assets, whether before
or after judgment if it finds that the servicemember's ability to comply with the judgment
or garnishment is materially affected by military service. 50 U.S.C. app. § 524. The stay
of execution may be ordered for any part of the servicemember's military service plus 90
days after discharge from the service. The court may also order the servicemember to
make installment payments during any stay ordered.
Additional Protections
Several additional rights are available under the SCRA. For example, when an action for
compliance with a contract is stayed under the SCRA, contractual penalties do not
accrue during the period of the stay. 50 U.S.C. app. § 523. The SCRA also provides in
most instances that a landlord cannot evict a servicemember or dependants from a
primary residence without a court order. In an eviction proceeding, the court may also
adjust the lease obligations to protect the interests of the parties. 50 U.S.C. app. § 531.
If the court stay the eviction proceeding, it may provide equitable relief to the landlord by
ordering garnishment of a portion of the servicemember's pay. Id. Under the SCRA a
servicemember may terminate residential and automotive leases if he or she is
transferred after the lease is made. 50 U.S.C. app. § 535. A court may also extend some
of the protections afforded a servicemember under the SCRA to persons co-liable or
secondarily liable on the servicemember's obligation. 50 U.S.C. app. § 513.
Applicability to Bankruptcy Proceedings
The language of the SCRA states that it is generally applicable in any action or
proceeding commenced in any court. 50 U.S.C. app. §§ 521, 522 and 524. Therefore,
absent contravening language with respect to bankruptcy proceedings, the SCRA
applies to all actions or proceedings before a bankruptcy court.
The applicability of the SCRA in bankruptcy proceedings is also evident in the Federal
Rules of Civil Procedure and the Federal Rules of Bankruptcy Procedure. For example,
the advisory committee note to Federal Rule for default judgments, Fed. R. Civ. P. 55(b),
states that it is directly affected by the SCRA. (2) Under Fed. R. Bankr. P. 7055 and 9014
of the Federal Rules of Bankruptcy Procedure, Fed. R. Civ. P. 55 is applicable in
bankruptcy adversary proceedings and contested matters. Thus, the default judgment
protections of the SCRA clearly apply in bankruptcy cases.
The bankruptcy court clerk's office is aware of the requirement that the plaintiff must
provide an affidavit stating whether the defendant is in the military before default may be
entered against the defendant. Bankruptcy Procedural Forms B260, B261A, and B261B,
and their accompanying instructions, provide additional guidance concerning the
applicability of the SCRA to default judgments and related procedural requirements.
________________________________________
NOTES
1. The requirement for an affidavit may be satisfied by a statement, declaration,
verification, or certificate in writing subscribed and certified or declared to be true under
penalty of perjury. 50 U.S.C. app. § 521(4). return to text
2. The advisory committee note to Fed. R. Civ. P. 55 comments on the applicability of the
Servicemembers' Civil Relief Act (formally known as the Soldiers' and Sailors' Civil
Relief Act of 1940) to default judgements as follows:
• The operation of Rule 55(b) (Judgment) is directly affected by the Soldiers' and
Sailors' Civil Relief Act of 1940, 50 U.S.C. Appendix, § 501 et seq. Section 200 of the Act
[50 U.S.C. Appendix, § 520] imposes specific requirements which must be fulfilled
before a default judgment can be entered, e.g., Ledwith v. Storkan, D.Neb.1942, 6 Fed.
Rules Serv. 60b.24, Case 2, 2 F.R.D. 539, and also provides for the vacation of a
judgment in certain circumstances. See discussion in Commentary, Effect of
Conscription Legislation on the Federal Rules, 1940, 3 Fed. Rules Serv. 725; 3 Moore's
Federal Practice, 1938, Cum. Supplement § 55.02. return to text
to members of the military against the entry of default judgments and gives the court the
ability to stay proceedings against military debtors.
a. General Provisions
b. Applicability to Bankruptcy Proceedings
________________________________________
Background
The Servicemembers' Civil Relief Act ("SCRA") is found at 50 U.S.C. app. §§ 501 et seq.
The purpose of the SCRA is strengthen and expedite national defense by giving
servicemembers certain protections in civil actions. By providing for the temporary
suspension of judicial and administrative proceedings and transactions that may
adversely affect servicemembers during their military service, the SCRA enables
servicemembers to focus their energy on the defense of the United States. Among other
things, the SCRA allows for forbearance and reduced interest on certain obligations
incurred prior to military service, and it restricts default judgments against
servicemembers and rental evictions of servicemembers and all their dependents. The
SCRA applies to all members of the United States military on active duty, and to U.S.
citizens serving in the military of United States allies in the prosecution of a war or
military action. The provisions of the SCRA generally end when a servicemember is
discharged from active duty or within 90 days of discharge, or when the servicemember
dies. Portions of the SCRA also apply to reservists and inductees who have received
orders but not yet reported to active duty or induction into the military service.
General Provisions
There are three primary areas of coverage under the SCRA: (1) protection against the
entry of default judgments; (2) stay of proceedings where the servicemember has notice
of the proceeding; and (3) stay or vacation of execution of judgments, attachments and
garnishments. 50 U.S.C. app. §§ 521, 522 and 524.
Protection Against Default Judgements
Section 521 of the SCRA establishes certain procedures that must be followed in all
civil proceedings in order to protect servicemember defendants against the entry of
default judgements. These procedures are outlined below:
• If a defendant is in default for failure to appear in the action filed by the plaintiff, the
plaintiff must file an affidavit (1) with the court before a default judgment may be entered.
The affidavit must state whether the defendant is in the military, or that the plaintiff was
unable to determine whether the defendant is in the military.
• If, based on the filed affidavits, the court cannot determine whether the defendant
is in the military, it may condition entry of judgment against the defendant upon the
plaintiff's filing of a bond. The bond would indemnify the defendant against any loss or
damage incurred because of the judgment if the judgment is later set aside in whole or
in part.
• The court may not order entry of judgment against the defendant if the defendant is
in the military until after the court appoints an attorney to represent the defendant.
• If requested by counsel for a servicemember defendant, or upon the court's own
motion, the court will grant a stay of proceedings for no less than 90 days if it
determines that (1) there may be a defense and the defense cannot be presented
without the defendant's presence; or (2) after due diligence the defendant's attorney has
not been able to contact the defendant or otherwise determine if a meritorious defense
exists.
• The court may, in its discretion, make further orders or enter further judgments to
protect the rights of the defendant under the SCRA.
• If a judgment is entered against the defendant while he or she is in military service
or within 60 days of discharge from military service, and the defendant was prejudiced
in making his or her defense because of his or her military service, the judgment may,
upon application by the defendant, be opened by the court and the defendant may then
provide a defense. Before the judgment may be opened, however, the defendant must
show that he or she has a meritorious or legal defense to some or all of the action.
Stay of Proceedings Where Servicemember Has Notice
Outside the default context, and at any time before final judgement in a civil action, a
person covered by the SCRA who has received notice of a proceeding may ask the court
to stay the proceeding. 50 U.S.C. app. § 522. The court may also order a stay on its own
motion. Id. The court will grant the servicemember's stay application and will stay the
proceeding for at least 90 days if the application includes: (1) a letter or other
communication setting forth facts demonstrating that the individual's current military
duty requirements materially affect the servicemember's ability to appear along with a
date when the servicemember will be able to appear; and (2) a letter or other
communication from the servicemember's commanding officer stating that the
servicemember's current military duty prevents his or her appearance and that military
leave is not authorized for the servicemember at the time of the letter. The court has
discretion to grant additional stays upon further application.
Stay or Vacation of Execution of Judgements, Attachments and Garnishments
In addition to the court's ability to regulate default judgments and stay proceedings, the
court may on its own motion and must upon application: (1) stay the execution of any
judgment or order entered against a servicemember; and (2) vacate or stay any
attachment or garnishment of the servicemember's property or assets, whether before
or after judgment if it finds that the servicemember's ability to comply with the judgment
or garnishment is materially affected by military service. 50 U.S.C. app. § 524. The stay
of execution may be ordered for any part of the servicemember's military service plus 90
days after discharge from the service. The court may also order the servicemember to
make installment payments during any stay ordered.
Additional Protections
Several additional rights are available under the SCRA. For example, when an action for
compliance with a contract is stayed under the SCRA, contractual penalties do not
accrue during the period of the stay. 50 U.S.C. app. § 523. The SCRA also provides in
most instances that a landlord cannot evict a servicemember or dependants from a
primary residence without a court order. In an eviction proceeding, the court may also
adjust the lease obligations to protect the interests of the parties. 50 U.S.C. app. § 531.
If the court stay the eviction proceeding, it may provide equitable relief to the landlord by
ordering garnishment of a portion of the servicemember's pay. Id. Under the SCRA a
servicemember may terminate residential and automotive leases if he or she is
transferred after the lease is made. 50 U.S.C. app. § 535. A court may also extend some
of the protections afforded a servicemember under the SCRA to persons co-liable or
secondarily liable on the servicemember's obligation. 50 U.S.C. app. § 513.
Applicability to Bankruptcy Proceedings
The language of the SCRA states that it is generally applicable in any action or
proceeding commenced in any court. 50 U.S.C. app. §§ 521, 522 and 524. Therefore,
absent contravening language with respect to bankruptcy proceedings, the SCRA
applies to all actions or proceedings before a bankruptcy court.
The applicability of the SCRA in bankruptcy proceedings is also evident in the Federal
Rules of Civil Procedure and the Federal Rules of Bankruptcy Procedure. For example,
the advisory committee note to Federal Rule for default judgments, Fed. R. Civ. P. 55(b),
states that it is directly affected by the SCRA. (2) Under Fed. R. Bankr. P. 7055 and 9014
of the Federal Rules of Bankruptcy Procedure, Fed. R. Civ. P. 55 is applicable in
bankruptcy adversary proceedings and contested matters. Thus, the default judgment
protections of the SCRA clearly apply in bankruptcy cases.
The bankruptcy court clerk's office is aware of the requirement that the plaintiff must
provide an affidavit stating whether the defendant is in the military before default may be
entered against the defendant. Bankruptcy Procedural Forms B260, B261A, and B261B,
and their accompanying instructions, provide additional guidance concerning the
applicability of the SCRA to default judgments and related procedural requirements.
________________________________________
NOTES
1. The requirement for an affidavit may be satisfied by a statement, declaration,
verification, or certificate in writing subscribed and certified or declared to be true under
penalty of perjury. 50 U.S.C. app. § 521(4). return to text
2. The advisory committee note to Fed. R. Civ. P. 55 comments on the applicability of the
Servicemembers' Civil Relief Act (formally known as the Soldiers' and Sailors' Civil
Relief Act of 1940) to default judgements as follows:
• The operation of Rule 55(b) (Judgment) is directly affected by the Soldiers' and
Sailors' Civil Relief Act of 1940, 50 U.S.C. Appendix, § 501 et seq. Section 200 of the Act
[50 U.S.C. Appendix, § 520] imposes specific requirements which must be fulfilled
before a default judgment can be entered, e.g., Ledwith v. Storkan, D.Neb.1942, 6 Fed.
Rules Serv. 60b.24, Case 2, 2 F.R.D. 539, and also provides for the vacation of a
judgment in certain circumstances. See discussion in Commentary, Effect of
Conscription Legislation on the Federal Rules, 1940, 3 Fed. Rules Serv. 725; 3 Moore's
Federal Practice, 1938, Cum. Supplement § 55.02. return to text
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Product Line
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