“Service Members Civil Relief Act” December 16 th , 2014

1. “Service Members Civil Relief Act”December 16th, 2014

2. Kenlyn T. Gretz President and CEO of…

3. This is not legal advice.Please contact your own attorney.

4. Soldiers’ & Sailors’ Civil Relief Act • Amended in 2003

5. Singer Elvis Presley returns home to the United States in a snow storm after Army service in Germany-1960.

6. Americollect’s goal is to help you understand the rights our service members have earned for their service. Our goal is NOT to point out how you can use the law to protect your collection process from these fine men and women who are serving and making our great county even better.

7. WHO? • Army • Navy • Air Force • Marine Corps • Coast Guard • *National Guard – engaged in active “federal service.” 30 days – national emergency.

8. WHO? • Public Health Service • National Oceanic and Atmospheric Administration in “active service.” • Reservists – “active duty” get some rights, not all. • Ordered for Induction • Induction

9. WHO? Absent from active duty due to: • sickness • wounds • leave • other lawful cause

10. Family & Dependents • Co-signers and primary signers • Spouses • Dependents • Anybody – 180 days prior to application – ½ of person’s support: • Grandma • Girlfriend • Same Sex Partner • Roommate

11. Secretary of Defense • Sends Written Notice of Benefit to active duty. • The “active duty” needs to make you aware they are invoking their right. • Tricky: you need to then monitor so you don’t violate and then turn off the benefits after they are done. • Bonus Question: Who is current Secretary of Defense?

12. How do you Monitor?

13. Prior Contracts & Services • Not new one’s incurred during active duty. • Child comes in for care while active duty. • Utility bill continues for spouse while in active duty. • You may want to follow for future while active duty.

14. Verifying • https://www.dmdc.osd.mil/appj/scra/scraHome.do • You can do without DOB – more accurate • Must enter twice • More information is better • Exact Names • If SSN does not match Name and if the SSN is in system as active duty, it will tell you. But not the reverse. • You are not required to check BEFORE Collection. • Sample

15. Active Duty – Material Effect • AD: Must assert their rights. • Must prove Material Effect of being in service. • Example: Elvis in the service in the late 1950’s was already famous & wealthy. Could assert the right, but a creditor opposing it would need to prove otherwise. • This test is for many provisions, but not all.

16. Waiver of Rights An Active Duty person may waive their rights, but not before they are active duty. (No forcing it in agreements at time of signing).

17. Extending Credit • If active duty exercises rights under the SCRA: • You cannot do the following based SOLEY on the fact they exercise their rights: • Determine they are unable to pay – assume • Deny or revoke credit – cut off credit • Change the terms or agreement – charge more interest • Refuse to grant more credit on same terms – revolving lower available • Adverse on Credit File • Insure Active Duty or change terms • Note in record they are “National Guard or reserves” – less of a service.

18. Extending Credit • You are not required to extend credit. Just cannot base your decision solely on this fact. • Termination of Service – and good payer? NO – NO. • You can list for collection. Some organizations hold the account to be patriotic. We agree.

19. Default Judgments • Note: Default – where the active duty does not show. • Affidavit is required at time of filing of summons. • If defendant is “active duty” and case already started, courts must appoint an attorney. You can still continue.

20. Default Judgments • Default Entered while active duty or 60 days after: Judgment can be reopened by application (90 days). Must have material affect and legal merit defense. • Example: Entered on 09-01-10. Inactive on 10-01-10, can reopen for up to 90 days from 10-01-10 or 01-01-11. • Example 2: Inactive on 10-01-10, entered judgment on 11-22-10 – have until 1-1-11 to reopen. • Courts can issue a 90-day Stay on Action: • Similar protections for actions on Student Loans.

22. Before You Sue! Ask your agency. Affidavit of Non-Military- PDF Or Word

23. Statute of Limitations • The active duty time does not count toward the statute of limitations. • They owe you money from 02-01-2007 - normal statute of limitations is 02-01-2013. However if they spend 1 year in Active Duty in 2009, then statute of limitations is 2014. • They sue for medical malpractice, the same goes. • How do you manage this?

24. Cap on Interest Rates • Obligations and Liabilities incurred prior to active duty must be less than 6%. • Service member or spouse. • Amount of interest accrued over 6% must be forgiven. • Payment must be decreased, not accelerated principal. • Example before: $400/M and interest was $173 (but 6% interest is only $145) You cannot require the same $400/M and apply the ($173- $145 = $28) $28 to principle. • Written Notice: not later than 180 days from going off of active duty. (back ward) Backdated.

25. Cap on Interest Rates • Interest: Doesn’t matter what you call it: late fee, service charges, collection service fees. Still 6% maximum. • Creditor Rights: You have ability to ask courts for protection of this right for active duty to prove up material affect. • Not on Student Loans. • Back to Normal Rate after service. • Not automatic. The active duty must exercise their right. • No material affect needed to get the 6%.

26. Cap on Interest Rates Judgments: 8% to12% - notify your agencies

27. Health Insurance Benefits • Eligible for Reinstatement • Had coverage day before active duty • Active Duty is over • No Exclusion or Waiting Period: • They or their covered dependents/insured • Condition was incurred before or during active duty. • Waiting Period or Exclusion is normal. 90 days not covered, but only lapsed 30 before active duty, then still wait 60 more when reinstated. • Not in the line of duty (if line of duty, then Government Coverage) • 120 from discharge of Active Duty to apply.

28. Business Debts of Active Duty • Active Duty has business whether LLC, Inc, or sole proprietor. • If personally liable (sole proprietor or signature of personal guarantee). • Personal Assets of Active Duty not specifically listed are not allowed to be liquidated during active duty. • Example: Kenlyn Rental LLC gets loan for $150,000. Collateral is $20,000 boat. Rest is personal guarantee from Kenlyn T. Gretz. (Only boat is accessible to satisfy during active duty)

29. Resource Used http://usmilitary.about.com/od/sscra/l/blscramenu.htm

30. OUR NEXT WEBINAR: RETURN TO SENDER? The Troubles with Mail Returns Why are you getting them? How to reduce them. If you find the right party, will you even collect? When to give up (and just list with collections). Host: Kenlyn T. Gretz Tuesday, February 19, 2015 1:00 PM - 1:45 PM CST If you would like to sign up, send an email to sales@americollect.com We will also be sending a reminder email.

31. Thank You. sales@americollect.com SIX time winner of Inc Magazine’s Fastest Growing Private Company! 2009 – 2014 SIX time winner of Inside ARM Best Places to work in Collections.