Issued by FDIC
§ 3931. Protection of servicemembers against default judgments.
[Section 201 of the Act]
(a) APPLICABILITY OF SECTION- This section applies to any civil action or proceeding, including any child custody proceeding, in which the defendant does not make an appearance.
(b) AFFIDAVIT REQUIREMENT-
(1) PLAINTIFF TO FILE AFFIDAVIT- In any action or proceeding covered by this section, the court, before entering judgment for the plaintiff, shall require the plaintiff to file with the court an affidavit--
(A) stating whether or not the defendant is in military service and showing necessary facts to support the affidavit; or
(B) if the plaintiff is unable to determine whether or not the defendant is in military service, stating that the plaintiff is unable to determine whether or not the defendant is in military service.
(2) APPOINTMENT OF ATTORNEY TO REPRESENT DEFENDANT IN MILITARY SERVICE-
If in an action covered by this section it appears that the defendant is in military service, the court may not enter a judgment until after the court appoints an attorney to represent the defendant. If an attorney appointed under this section to represent a servicemember cannot locate the servicemember, actions by the attorney in the case shall not waive any defense of the servicemember or otherwise bind the servicemember.
(3) DEFENDANT'S MILITARY STATUS NOT ASCERTAINED BY AFFIDAVIT-
If based upon the affidavits filed in such an action, the court is unable to determine whether the defendant is in military service, the court, before entering judgment, may require the plaintiff to file a bond in an amount approved by the court. If the defendant is later found to be in military service, the bond shall be available to indemnify the defendant against any loss or damage the defendant may suffer by reason of any judgment for the plaintiff against the defendant, should the judgment be set aside in whole or in part. The bond shall remain in effect until expiration of the time for appeal and setting aside of a judgment under applicable Federal or State law or regulation or under any applicable ordinance of a political subdivision of a State. The court may issue such orders or enter such judgments as the court determines necessary to protect the rights of the defendant under this chapter.
(4) SATISFACTION OF REQUIREMENT FOR AFFIDAVIT-
The requirement for an affidavit under paragraph (1) may be satisfied by a statement, declaration, verification, or certificate, in writing, subscribed and certified or declared to be true under penalty of perjury.
(c) PENALTY FOR MAKING OR USING FALSE AFFIDAVIT-
A person who makes or uses an affidavit permitted under subsection (b) (or a statement, declaration, verification, or certificate as authorized under subsection (b)(4)) knowing it to be false, shall be fined as provided in title 18, United States Code, or imprisoned for not more than one year, or both.
(d) STAY OF PROCEEDINGS-
In an action covered by this section in which the defendant is in military service, the court shall grant a stay of proceedings for a minimum period of 90 days under this subsection upon application of counsel, or on the court's own motion, if the court determines that--
(1) there may be a defense to the action and a defense cannot be presented without the presence of the defendant; or
(2) after due diligence, counsel has been unable to contact the defendant or otherwise determine if a meritorious defense exists.
(e) INAPPLICABILITY OF SECTION 3932 PROCEDURES-
A stay of proceedings under subsection (d) shall not be controlled by procedures or requirements under section 3932.
(f) SECTION 3932 PROTECTION-
If a servicemember who is a defendant in an action covered by this section receives actual notice of the action, the servicemember may request a stay of proceeding under section 3932.
(g) VACATION OR SETTING ASIDE OF DEFAULT JUDGMENTS-
(1) AUTHORITY FOR COURT TO VACATE OR SET ASIDE JUDGMENT-
If a default judgment is entered in an action covered by this section against a servicemember during the servicemember's period of military service (or within 60 days after termination of or release from such military service), the court entering the judgment shall, upon application by or on behalf of the servicemember, reopen the judgment for the purpose of allowing the servicemember to defend the action if it appears that--
(A) the servicemember was materially affected by reason of that military service in making a defense to the action; and
(B) the servicemember has a meritorious or legal defense to the action or some part of it.
(2) TIME FOR FILING APPLICATION-
An application under this subsection must be filed not later than 90 days after the date of the termination of or release from military service.
(h) PROTECTION OF BONA FIDE PURCHASER-
If a court vacates, sets aside, or reverses a default judgment against a servicemember and the vacating, setting aside, or reversing is because of a provision of this chapter, that action shall not impair a right or title acquired by a bona fide purchaser for value under the default judgment.