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#739581 - 05/24/07 03:30 PM Enlistment date / active date
goingtoexperts Offline
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Good morning, service member enlisted 12/16/06. Note date of loan is 1/8/07. Active duty date is 5/29/07. Does service member qualify for rate reduction? Thanks!

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Lending to Servicemembers (SCRA, JWNDAA), War, Terrorism
#740948 - 05/25/07 07:36 PM Re: Enlistment date / active date goingtoexperts
Andy_Z Offline
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Not if they enlisted. Protections for those drafted or called to active duty start when they get orders, as I recall. But if you enlist, you know what you're getting into and your finances should work.

You should verify this. Section 101 of the SCRA is what you're after. It sounds like here, active duty starts on 5/29/07, and that is when protections would apply. This debt precedes military service from the sounds of it.
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#809438 - 09/05/07 06:22 PM Re: Enlistment date / active date Andy_Z
Nanwa Offline
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Does active duty begin with boot camp? Or when they are sent on a mission, like to Iraq or to help with hurricane cleanup?
Last edited by Nanwa; 09/05/07 06:22 PM.
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#1075449 - 11/03/08 06:43 PM Re: Enlistment date / active date Andy_Z
RebekahL CRCM Offline
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Originally Posted By: Andy Z
Not if they enlisted. Protections for those drafted or called to active duty start when they get orders, as I recall. But if you enlist, you know what you're getting into and your finances should work.

You should verify this. Section 101 of the SCRA is what you're after. It sounds like here, active duty starts on 5/29/07, and that is when protections would apply. This debt precedes military service from the sounds of it.


I'm confused now. If this debt is considered pre-military debt (since it occurred before active duty), then doesn't it qualify for the 6% rate cap?
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#1079058 - 11/07/08 07:12 PM Re: Enlistment date / active date RebekahL CRCM
Compliancer Offline
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As referenced in SCRA, active duty is defined in Title 10 section 101(d)(1)

(d) Duty Status. - The following definitions relating to duty status apply in this title: (1) The term 'active duty' means full-time duty in the active military service of the United States. Such term includes full-time training duty, annual training duty, and attendance, while in the active military service, at a school designated as a service school by law or by the Secretary of the military department concerned. Such term does not include full-time National Guard duty.

The date the new servicemember 1st reports for active duty - walks through the military gate - is the date of active duty.

As Andy stated, only called-to-active-duty reservists and the like get the SCRA benefit from the date the orders are received.
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#1079293 - 11/07/08 09:53 PM Re: Enlistment date / active date Compliancer
RebekahL CRCM Offline
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So, if new enlistees aren't considered to be on active duty until they walk through the gate, then loans they obtain between enlistment and boot camp ARE elible for 6% rates? Since the debt occurred prior to active duty, it would seem so.

If this is the case, then the answer to the question from the first post concerning the 1/8/07 loan would be yes, it does qualify for rate reduction, right? This is were I'm confused by Andy's response of "not if they enlisted".
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#1081218 - 11/13/08 04:42 PM Re: Enlistment date / active date RebekahL CRCM
Andy_Z Offline
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It is getting confusing and it depends on the definitions. Maybe I read the question wrong? Above I did say that it sounded from the description like the debt preceded the active duty date and would be covered.

In answer to your question, if I sign up for a delayed enlistment today, borrow from the bank tomorrow, and report for active duty the day after, that is pre-service debt and that would be eligible for SCRA rate protections. I volunteered for duty and my reporting date is two days from now. That is my active duty date.

I had a similar question from a banker some time ago. As I recall it was a reservist who received their orders, but wasn't reporting to active duty for some weeks or months. Debt that person had now could be claimed under the SCRA and revert to 6%. But this reservist went and borrowed money. The contractual rate was higher than 6% and they claimed after the loan was funded, that they wanted relief. Because they had not yet reported for active duty, they could create a gray area that by definition seemed to protect them. This was pre-service debt. I contacted a JAG officer who agreed that the reservist who borrowed between getting orders and reporting would be covered. He emphasized that this would be unethical. But that didn't do the bank any good. Yes, they could have fought it. But where would they have gotten? And the negative press would have been much more costly than the difference between the contract rate and 6%.
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