If you have a mortgage or installment contract that began before you went on active duty you are protected from having your home foreclosed on or an item repossessed by the lender without being taken to court. This rule is part of the Servicemembers Civil Relief Act (SCRA) which protects military members from being taken advantage of by lenders or having their military service cause undue financial hardship.
If your military service “materially affects” your ability to make the payments on time the seller cannot repossess the item, take you to court, or make any bad credit reports on your contract without a court order. You must have paid a deposit or at least one payment before entering active duty.
The SCRA protects you against foreclosure on your mortgage as long as:
- The mortgage is on either real or personal property;
- The mortgage began before entry on active duty;
- The property was owned by you or a family member prior to your entry on active duty;
- The property is still owned by the you or your family member when you request relief;
- Your ability to pay the mortgage is materially affected by your military service.
If all these requirements are met, the lender must get a court order before foreclosing on your property.
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