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.  

Learn more about whether you’re covered by the SCRA.

Learn more about the Servicemembers Civil Relief Act from the Department of Justice.

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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