"Around 3 a.m., I heard the truck in the driveway, and when I looked out the window, I thought someone was stealing his car," Carolyn said. "I woke my mother and my sister and started to the door. That's when we heard pounding on the front door. It was so incredibly scary."
Soldiers fighting overseas aren't supposed to face a financial war at home. The Servicemembers Civil Relief Act, which has its roots in the Civil War, is supposed to prevent this kind of thing. But it doesn't always work that way.
Carolyn, a reader from Connecticut, had a harrowing experience a couple of years ago when her brother was in Afghanistan.
"One of the men was standing at the door, the other was still in the driveway getting ready to hook up my brother's car to the tow truck," said Carolyn, from Connecticut. She asked that her family's identity be protected. "They were both wearing badges on chains and presented themselves as law enforcement. They wouldn't tell us which repo company they worked for."
Needless to say, the repo company and bank involved didn't have a court order permitting the repossession – that's one of the requirements of the Servicemembers Civil Relief Act. Banks don't want to go to court to before repossessing a car, in part because judges can force the bank taking the car to return some of the payments made by the soldier. So they often just show up in the middle of the night instead.
"They had no paperwork to show he was behind enough in his payments to warrant repossession. The truck itself was nondescript. There was nothing on it that showed what company they worked for. They refused to tell us their names and refused to show us any identification… They hooked the car up. They still wouldn't tell us who they were or where they were going, and left without giving us paperwork or even a phone number."
You don't want women and men fighting overseas to be worried about fighting for their rights stateside. So the Servicemembers Civil Relief Act provides some essential protections to active duty military. The law insulates provides soldiers with special protections from foreclosure, garnishments, evictions, and all manner of judgments while they are serving their country. Theoretically, that helps soldiers focus on the task at hand. Not in Carolyn's brother John's case.
The car was critical for family transportation. Their other family car had recently broken down, so the loss of John's car left them stranded. And, for the moment, with no idea where the car might be. There was only one way forward: To contact John in Afghanistan.
"My mother called John's rear detachment to see if there was any way someone could get a hold of John so he could make some phone calls when he was able. Nobody had power of attorney so the only person who could fix this was John. They were able to pull him out of the field and he went straight to JAG (Judge Advocate General's office) because he didn't know what to do either. As far as he knew he had set up automatic payments. JAG told him what to do and he was able to get a hold of (the auto lender)… The finance company accepted the back payments from us since John still had to get in touch with his bank and find out why the automatic payment wasn't working. (The bank) contacted the repo company who then contacted my mother."
The repo firm said they would deliver the car back to the family. But even then, the episode wasn't over. There was still arguing ahead.
"They said they would be there at 8 p.m., but didn't show up until 10:30 p.m. He was just as rude and nasty as the last time he was there… He wanted my mother to sign some paperwork that said she was taking responsibility for the tow. She refused because he broke federal law by repossessing John's car. He refused to unhook the car unless she signed the paperwork. So, she called the police and he refused to speak to the police. He called his boss and he told her it was company policy. "
After another round of negotiation, the repo driver agreed to unhook the car, but said he would mail the paperwork later. Instead, there was a special delivery.
"Later that night our mailbox, which was mounted on a post with three other mailboxes ours being second from the left, was broken off the post and thrown into the bushes. We still don't know the name of the repo company or the men we dealt with."
Carolyn and her family had very little understanding of their rights on that night in 2009 — she's since researched the SCRA extensively. Debt collectors and repo men often count on the element of surprise to handle their assignments.
"I think had they not shown up in the middle of the night we would have been more clear-headed and his car would have never left the driveway. After the whole thing we spent a good amount of time researching what we should have done."
Violations of the SCRA are common. In one case, a Bank of America subsidiary agreed to pay $39 million in restitution for soldiers whose homes were allegedly illegally foreclosed upon. Another involving Sallie Mae saw servicemembers allegedly overcharged for student loan interest. And Capital One also has settled a lawsuit over a series of alleged loan product violations including car repossession without court orders.
"Every day, our brave men and women in uniform make tremendous sacrifices to protect the American people from a range of global threats – and my colleagues and I are determined to ensure that they receive our strongest support here at home," said Attorney General Eric Holder in announcing the settlement.
Anthony DeWitt, a Missouri-based lawyer who often represents debtors in collections cases, said it's important for active duty military members to know their rights and share the information with family. The law only protects soldiers who know enough to invoke them.
"The Soldiers and Sailors Civil Relief Act is still federal law, but has some holes," he warned. Lenders who get soldiers to sign waivers, for example, can be subject to repossession with a court order. "(Repo agents) often wear badges to make you think they are acting within the law, but you can buy badges online for very little money. "
A car repossession can have a major negative impact on your credit score, causing more insult to injury when your car is actually taken. You can check your credit reports to see if your repossession has been reported to the bureaus (you can get free copies of your credit reports once a year) and you can see the impact late car payments or a repossession are having on your credit scores for free on Credit.com.
Consumer rights under the SCRA are extensive. For example, Judges hearing car repossession cases can also require the bank to make what's called an "equity payment" – granting the difference between the value of the car and the balance of the debt to the car owner. The payment must be made before the car is repossessed.
And here's a thought worth considering: Are the rights afforded active duty military simply rights that all consumers should enjoy?
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