The Turning Point: SCRA could be money-saving tool for junior Airmen

The turning point is the point in a person's life when they are fed up with their circumstances and decide to seek help. The Turning Point Web page will launch this week, and will be continually updated with new and improved information. (U.S. Air Force graphic by Gary Rogers)

The turning point is the point in a person's life when they are fed up with their circumstances and decide to seek help. The Turning Point Web page launched recently, and will be continually updated with new and improved information. (U.S. Air Force graphic by Gary Rogers)

RAF MILDENHALL, England -- How high is high?

For a basketball player, high is about 304.8 cm - what they need to jump to slam-dunk the ball.

For a KC-135 pilot, high is about 50,000 feet - the Stratotanker's operational ceiling.

For an 8-year old child dreaming of becoming an astronaut, the moon is pretty darned high.

Still, for a junior-enlisted Airman or their family member, high may be even higher than the moon - particularly when referring to annual percentages on credit card debt.

Helping someone leap 304.8 cm or get accepted into pilot's training should perhaps be left to another professional. However, if debt is what's keeping an Airman from getting their feet off the ground, there's help right here on base for them.

Maybe their life has reached the turning point.

One of the six major provisions listed under the Servicemembers Civil Relief Act, which replaced the Soldiers' and Sailors' Civil Relief Act in 2003, is a 6 percent maximum interest rate. The act reads:

The SCRA provides that no obligation or liability incurred by a servicemember prior to entry onto active duty shall bear interest at an annual rate in excess of 6 percent. This provision does not apply to any debt incurred after entry onto active duty or to any guaranteed student loan. A lender may only get relief from the 6 percent cap by going to court and showing that the servicemember's ability to pay the contract interest rate is not materially affected by reason of military service. Upon such a showing, the court may make any order it deems just.

In layman's terms:

"Airmen request a reduction of their interest rate to 6 percent on their pre-service obligations by writing a letter to their lender," said Capt. Jeffrey Martin, 100th Air Refueling Wing Legal Office civil law chief. "In the letter, Airmen must be able to articulate how coming on active duty adversely affected their ability to pay their pre-service obligations. This letter must also contain a copy of their military orders (from the date they came on active duty as well as any subsequent orders)."

By requesting a reduction in interest rates on things like credit cards and car loans, Airmen can potentially save thousands of dollars. However, there is recourse for creditors or lenders to challenge the request.

"It is important to note that while a creditor is obliged to cap the pre-service obligations to 6 percent once receiving the letter with orders, they have the ability to contest the request by going to court and arguing that the member still has the ability to pay the obligation at an interest rate above 6 percent," Captain Martin explained. "The court then makes a determination as they see fit."

The legal office has pamphlets that relate to SCRA in general. Attorneys are also available for one-on-one consultation. Airmen may come in during walk-in hours on Tuesday and Thursday from 1 to 4 p.m., or by calling DSN 238-2028 for an appointment, if needed.

The SCRA is not the only tool Airmen can utilize to reduce their debts.

All squadrons on RAF Mildenhall have a community readiness consultant or technician assigned to that squadron, said Jeffrey Nelson, Airman & Family Readiness Center supervisory community readiness consultant. Any Airman, family member, or DoD Civilian can call or visit the A&FRC to connect with their unit's consultant. About 80 percent of A&FRC cases are handled at that level.

For more complicated matters, there is a subject matter expert on the A&FRC staff to handle the issue. Schedule an appointment by calling 238-3406.

"While information such as the Servicemembers Civil Relief Act is briefed to many of our customers, it is often only part of a much more comprehensive solution," said Mr. Nelson. "One may come in for information on the SCRA only to find out they also need to change their [income tax] withholding, obtain renter's insurance, and check into enrolling in TSP."

For Team Mildenhall members who simply want to obtain general information regarding the SCRA or other financial topics, Mr. Nelson recommends they navigate to www.militaryonesource.com, where "they will find an enormous amount of information on a myriad of financial topics and other subjects."

The A&FRC can generate spending plans for customers showing financial wellbeing with items such as debt-to-income ratios, debt-to-disposable income ratios and expense breakdowns by category.

"For those with emergent financial needs, we are the office where Airmen and families can receive Air Force Aid Society assistance," Mr. Nelson said. "We also offer information to those who want to know more about investing, buying a home, or financing their child's college education."

Editor's note: The Turning Point is a recurring series scheduled to continue through May 2010. Look for part 6 of The Turning Point on www.mildenhall.af.mil soon.