I am a servicemember and having trouble paying my auto loan. What should I know about auto repossession and protections under the Servicemembers Civil Relief Act (SCRA)?

Answer: The SCRA gives you and your family certain legal and financial protections relating to installment contracts, like an auto loan.

The SCRA prohibits creditors from repossessing personal property, including your vehicle, without a court order, based on breach of a pre-service contract. That means that even if you breach your contract by, for example, failing to make your monthly payments, the creditor must first file a lawsuit and get an order from a judge before your vehicle can be repossessed. This protection only applies if you:

  • purchased or leased the vehicle, or other personal property, before entering military service (see Tip below for more information); and
  • made a deposit or installment payment on the property before entering military service (see Tip below for more information).  

Even if you’re protected by the SCRA from repossession without a court order, failure to pay still may mean you’re breaching the contract and you still may be charged fees associated with your failure to pay, such as a late fee. Your missed payments can be reported to credit reporting agencies and you could have debt collection or a lawsuit to collect the money filed against you.  These Federal protections under the SCRA are in addition to any other protections you might have under your state law. Consult your local JAG office for more information. To find your JAG Legal Assistance Office use the locator.

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