We're the Consumer Financial Protection Bureau (CFPB), a U.S. government agency that makes sure banks, lenders, and other financial companies treat you fairly.
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)?
Answer:
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. That means
that even if you violate 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 applies only
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.
Even if you’re protected by the SCRA from repossession without a court
order, if you do not pay you could still be violating your contract. 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. These Federal protections under the SCRA are in addition to
any other protections you might have under your state law.
If your creditor repossesses your vehicle and
you have questions, contact your local JAG office for more information. To find your JAG Legal Assistance Office use the locator. You also may be able to get assistance from your state attorney general.
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