Repossession Laws Under the SCRA

If you entered into a loan secured by personal property (auto, boat, RV, etc.) and made at least one payment or a deposit on the loan before you started active duty, you have certain protections against repossession of that property in the event of a default on the loan.

The SCRA provides that a creditor cannot repossess your property while you are on active duty without first getting a court order. This means that a lender cannot repossess your car, or other personal property, without first starting a lawsuit, giving you notice, and convincing a judge to approve the repossession given that you are on active duty.

If you receive notice that the lender is trying to repossess while you are on active duty, let the lender know you are on active duty (or ask your family member to do so). Your family members may also have certain protections under the SCRA. Do this as quickly as possible. But note that the SCRA does not contain a requirement for the servicemember to provide notice of active duty status.

If a lawsuit to repossess has been started to get a court order allowing the creditor to repossess, the SCRA gives you the right to ask for a “stay” of the lawsuit until you are more able to defend yourself in court. A “stay” means that the lawsuit is suspended for a specific period of time. The SCRA gives servicemembers an automatic 90 day stay. But you can ask for more time. You will need to let the judge know why you need more time to defend the lawsuit. If you are deployed and you will not be back home for some period of time, that may be reason for additional time. Also, the judge may adjust your loan obligation depending on the facts. It will be up to the judge to decide.

If a lawsuit to repossess was started, but you did not receive notice of it, you have the opportunity to undo the repossession and/or get damages. If the lender obtained a “Default Judgment” from the court, it had to first file an affidavit stating your military status. If the affidavit incorrectly states that you were not on active duty when in fact you were (or the lender’s lawyer didn’t file an affidavit at all), you may have a claim against the lender for violating the SCRA.

Contact the lawyers at Teske Micko to discuss your potential claim. Under the SCRA, you can ask for actual damages and/or punitive damages if the lender violated the law. You can recover your costs and attorney fees if you have to bring an action to enforce your rights. Also, claims that are small individually, may be possible to bring as a class action. This gives the servicemember the opportunity to not only vindicate his or her rights under the SCRA, but also to vindicate the rights of other military members that had the same thing happen to them. Teske Micko offers initial consultations regarding SCRA claims.

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