SCRA and Loan to Estate - Andy Zavoina

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SCRA and Loan to Estate
by Andy Zavoina, BOL Guru
Guru BIOS

Question: Regarding the Servicemembers Civil Relief Act: We received a request from a serviceman asking for the SCRA benefit on a loan; however, the loan is in the ESTATE of (I think) his father. I don't know if he is the executor or not. Would this person be eligible for the SCRA benefit if he is the executor? What if he assumes the debt?

Answer: You may need to verify this with your counsel, but it is not your customer's personal debt; it is that of the estate of his father. If the father had the debt and was called to active duty or was otherwise covered, I would say there are some concessions to be made. If the father passed away and the executor happens to be in the service, there is no personal liability and SCRA benefits are not due.

Also, protections are there "during the period of military service," as defined under 101(3) of the Act. It states, "The term �period of military service� means the period beginning on the date on which a servicemember enters military service and ending on the date on which the servicemember is released from military service or dies while in military service." If it was the father who was covered, his death may have impacted the protections gained under the Act.

Certainly this is technical, and your bank may choose to handle the account differently if this is the case than if this had been some local accidental death.

First published on BankersOnline.com 1/17/05

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