DCollins: I believe that all active duty military personnel are entitled to the protections of the SSCRA, including reduction of the interest rate and cancellation of fines and penalties. However, the interest rate reduction and fines and penalties get different treatment under the SSCRA.
This reduction is automatic and it can be permanent during the period of active duty.
A lender always has the burden of proving that the active duty status didnt "materially affect" the service member's ability to pay the debt. If the lender cant meet this burden, then the interest reate is reduced to 6% during the period of active service.
see 50 Appx USC §526
CANCELLATION OF FINES AND PENALTIES
Unlike the reduction of the interest rate, this relief is not automatic. Fines and penalties cant accrue for failure to comply w/a contract unless a court has issued a stay w/respect to a service member's duty to perform the contract.
Therefore, a lender can ACCRUE late charges, fes associated with the early cancellation of a vehicle lease and other "penalties". Whether or not it can COLLECT them will depend upon whether a court relieves a service member from his/her duty to pay the late charges, etc..
Once again, it appears that the lender has the burden of proving that the service member's military duty didnt "materially affect" his/her ability to pay the "penalty".
Alternatively, it is possible for a lender to collect late charges, etc. only to have a court subsequently relieve the service member from their payment (ie. the lender will have to return the "penalty" already paid).
see 50 Appx USC §522
In you hypo, its hard to see how the service member could win argiung that his/her active duty status prevented him/her from performing under the vehicle lease. S/he had already admitted s/he couldnt keep up w/the payments before active duty began. However, a court could find that his/her active duty status does prejudice the ability to pay the fees that are now associated w/surrendering the vehicle and cancelling the lease.
I dont see a reason not to charge the fees; whether you'll ultimately collect them is another matter. If the fees are substantial, it may be worth a court fight. Otherwise, it will be the proverbial "cost of doing business".
I AM NOT ENGAGED IN PROVIDING LEGAL ADVICE AND THE VIEWS EXPRESSED ARE NOT THOSE OF MY EMPLOYER