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I’m in the military and having trouble paying my auto loan. What should I know about auto repossession and protections under the Servicemembers Civil Relief Act (SCRA)?

The SCRA gives active-duty servicemembers certain legal and financial protections relating to installment contracts, like an auto loan or lease.

The SCRA prohibits creditors from repossessing personal property, including your vehicle, without a court order, based on breach of a contract you entered into prior to active-duty military service. For example, even if you violate your contract by 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; and
  • made a deposit or installment payment on the vehicle, or other personal property, before entering military service.

These federal protections under the SCRA are in addition to any other protections you might have under your state law.

Even if you’re protected by the SCRA from repossession without a court order, you could still be violating your contract if you do not pay. As a result, you may be charged fees associated with your failure to pay, such as a late fee. Your missed payments can be reported to credit reporting companies, and the creditor can try to collect the debt, including by filing a lawsuit against you.

If your creditor repossesses your vehicle and you have questions, contact your closest legal assistance (JAG) office for more information. You also may be able to get assistance from your state attorney general .