I need alittle help. I have a customer who always paid about 45 days late on his auto loan. When he enlisted in the Army, we lowered his interest rate and he was able to make his payments timely until May of this year. Now he will not pay. He even called and asked me to remove the loan from his credit history, because he could not get another loan since we reported him past due. He says he knows there is nothing we can do to him while he is enlisted. Do I just have to wait until he is discharged or what? I wouldn't wish this problem on anyone else, but I am sure there are other lenders that have encountered this situation and I would like to know how you are handling these situations.

Put away your FDCPA hat and look at Army Regulation 600-15. While a commanding officer cannot force a soldier to pay a debt, the Army does not want someone hiding behind them from debts either. For that reason a commander can apply influence to assist you in collecting your debt or recovering your collateral.

It has been some years since I was collecting debts and admittedly SSCRA wasn't an issue when I was. I can't say either way that you'll be successful, but it is worth the research and a try.

We had a similar issue except that the individual said up front that he would not be making the payments. He was in the Marines and I found out that there was a Sergeant who was specifically assigned as a liaison between creditors and the enlisted folks to handle SSCRA situations. You might try to find out if the Army has someone in the same capacity.

When I was proudly wearing the uniform the CO needed to pull you into his office just ONCE, before you got the message that not fulfilling your obligations wasn't going to fly in his squadron.

I would contact the soldier's Company Commander or Legal Affairs unit to see if this can't be cleared up so it doesn't hinder his/her ability to focus full time on defending our country.

As for the SSCRA - Section 531 Installment contracts for purchase of property makes it clear (to me) that you can not repossess the property (auto in this case) except by action in a court of competent jurisdiction.

Sec. 531 Installment contracts for purchase of property.

(1) No person who has received, or whose assignor has received, under a contract for the purchase of real or personal property, or of lease or bailment with a view to purchase of such property, a deposit or installment of the purchase price, or a deposit or installment under the contract, lease, or bailment, from a person or from the assignor of a person who, after the date of payment of such deposit or installment, has entered military service, shall exercise any right or option under such contract to rescind or terminate the contract or resume possession of the property for nonpayment of any installment thereunder due or for any other breach of the terms thereof occurring prior to or during the period of such military service, except by action in a court of competent jurisdiction.

Good Luck.

Thank all of you for your help. I get so much information from this forum. It makes me wonder how I managed all those other years!!

1) Long term, you are in good shape. Suppose he uses his VA standing to purchase a house. You will be able to
collect loan plus interest plus penalties against equity.

2) "Enlisted" is not always the same as active duty.

3) I see no requirement that you attempt to remove negative credit history. Considering his/her attitude,
other financial institutions have a right to know the accumulated reputation of the borrower.