The Servicemember Civil Relief Act (SCRA) has recently undergone amendments to enhance the protections provided to servicemembers and their dependents. Initially enacted in 2003, the SCRA was amended as part of the Veterans Auto and Education Improvement Act of 2022. This comprehensive guide aims to provide divorce and family law practitioners with an overview of the updated SCRA, its goals, and its impact on military divorces. We will specifically focus on the changes made to contract termination, taxes, and professional licenses.
The SCRA is a federal law that provides vital protections for servicemembers and their families. It covers contract and consumer transactions, civil legal proceedings, and taxation matters, serving as a safeguard for those whose financial affairs may be negatively impacted by military service.
The primary objectives of the SCRA are:
In divorce and family law cases involving servicemembers, the SCRA has significant implications. Here are some key areas where the SCRA impacts military divorces:
a. Automatic Stay of Proceedings:
The SCRA allows for the temporary suspension of certain civil proceedings, including divorce and child custody cases, upon request or the court’s own motion. This stay of proceedings grants servicemembers the opportunity to focus on their military duties without the added stress of legal matters.
b. Stay Extensions and Stay Terminations:
Servicemembers can request additional stay extensions if their military duties hinder their ability to participate effectively in divorce proceedings. The court may grant these extensions or terminate the stay under certain circumstances.
c. Protection Against Default Judgments:
The SCRA protects servicemembers from default judgments if they fail to appear in court due to their military service obligations. This provision ensures that servicemembers have a fair chance to present their case and defend their rights.
d. Interest Rate Reduction:
Under the SCRA, servicemembers are entitled to reduced interest rates on pre-existing loans incurred before entering active duty. This reduction applies to various types of debt, including mortgages, credit cards, student loans, and more.
a. Contracts:
Effective January 2023, the SCRA’s contract termination provision has been expanded to include gym memberships, fitness programs, and home security services. Previously, only cell phone service, internet access, and cable television were covered. Additionally, these contract termination protections now extend to dependents who accompany servicemembers during relocation, even if the servicemember is not a cosigner or account holder.
b. Residency:
The SCRA now provides servicemembers and their spouses with increased freedom to elect a domicile for tax purposes. While previously protected from state income tax based solely on their duty station, they had limited flexibility in changing their residence. With the amendments, servicemembers can now choose between their residence, their spouse’s residence, or their permanent duty station as their domicile for tax purposes, granting greater flexibility to the member and their family.
c. Licenses:
The 2022 amendments introduced a new section allowing servicemembers and their spouses with active professional licenses to transfer those licenses to their new jurisdiction. To obtain a transferred license, the applicant must provide a copy of their military orders to the licensing authority in the new jurisdiction, be in good standing in the previous jurisdiction, and have actively used the license within the last two years. The individual must adhere to the standards and continuing education requirements of the new jurisdiction, and the sought license must be of the same nature and scope. Notably, licenses to practice law are still not transferable under this provision.
Who is not covered by the Servicemembers Civil Relief Act?
The SCRA does not cover individuals who are not active-duty servicemembers or members of the National Guard or Reserves on active duty.
Do SCRA benefits extend to spouses?
Yes, certain benefits under the SCRA, such as contract termination protections, can now be extended to dependents who accompany servicemembers during relocation.
The Servicemember Civil Relief Act of 2022 introduces crucial amendments that further enhance the legal protections offered to servicemembers and their dependents. Understanding these updates is essential for divorce and family law practitioners working with military clients, as it ensures they can provide effective representation and support. By staying informed about the SCRA and its recent amendments, practitioners can navigate military divorce cases with greater expertise, upholding the rights of servicemembers and their families.
