Credit & Loans | Stateside Legal

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A Servicemember’s Guide to Student Loan Interest Rates

Since August 14, 2008, the Higher Education Opportunity Act has also made it possible for servicemembers to use the SCRA to have their interest rate reduced to six (6) percent on federal student loans that were taken prior to their entry into active duty.

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Credit and Debt Collection Overview

Consumer credit issues affect us all. Here are the answers to a few of the most commonly asked questions.

Cell Phone Contracts and the SCRA

The Servicemember's Civil Relief Act (SCRA) might be helpful if you need to cancel or change your cell phone contract because you received new military orders to an area not supported by the contract.

Debts

November 28, 2020

Question:

I'm 100% service-connected. If I purchase vs lease a car; will the IRS or any creditors be able to make me sell my asset, to satisfy any outstanding taxes, if the purchase is made with VA. disability pay?

Jim's Reply:

Your question is much more complex than you realize. In a nutshell, VA disability pay can not be garnished to pay for debt.

But VA disability pay may be clawed back if you owe federal debt (IRS, student loans) and it may be apportioned if you owe child support or alimony.

So far as any automotive purchases or leases or rentals go, your method of payment won't have anything to do with any financial transaction in the future. If you fall behind on payments, the vehicle may be repoed no matter how you've paid for it.

I don't know that anyone can make you sell existing assets to pay taxes. That's a new one on me and you'd have to consult a tax lawyer to be sure but that doesn't sound realistic. Otherwise, make the best deal you can, keep timely with payments and you won't have any problems.

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Loss-Mitigation FAQs for Veterans and Servicemembers

Read about Loss-Mitigation as it relates to veterans and servicemembers. Loss-mitigation refers to the methods lenders use to avoid having to foreclose on your home.

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Interactive Form - Auto Lease Termination

The Purpose of the Service Members’ Civil Relief Act (SCRA) is to provide protection to service members who have difficulty meeting their financial and legal obligations because of their military service. If you are called to active duty for at least 180 days, then you may terminate a motor vehicle lease duty without paying an early termination fee or other penalty. The motor vehicle lease must have been signed before being called to active duty.

Issue with Financial Product or Service?

If you have issues with your credit card, mortgage, credit reporting, debt collection, bank account or service, money transfer, payday loan, private student loan, or other consumer loan submit a complaint or call toll-free at (855) 411-CFPB (2372).

Interactive Form - Letter to Request Lower Credit Card Interest Rate

As a member of the Armed Forces, Reserves, National Guard or other uniformed services, you have some financial protections for you and your family when you are called into active duty military service.

Interactive Form - Letter to Request 6% Loan Interest Rate

When you go on active duty, it may be hard to keep up with all of your credit payments. This is especially true if you have loans with high interest rates. The Servicemembers Civil Relief Act (“SCRA”) may allow you to reduce your rate of interest on those pre-existing loans while you are on active duty. This federal law sets a maximum interest rate of 6%. (This includes service charges, renewal charges and fees.)

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Pension Advances: Not So Fast

If you're looking for ways to generate cash to make ends meet, a pension advance may sound like the solution. However, before you sign on the dotted line it's important to know what you are getting yourself into. Terms may be hidden and you could find yourself in a bad deal!