Is there a statute of limitations on the ability for someone to claim relief under the SSCRA?

We have a borrower who is behind on their payments and is now disputing the interest accured on his loan BECAUSE - 12 YEARS AGO the borrower claims he served in the Gulf War. (The loan was in place at that time - it's a long term loan.)

So 2 questions:
1. Can someone retroactively claim relief even if they didn't notify us at the time of service?

2. Is there a limitation of time for claiming relief?

Before we demand all his proof of service and everything, we want to make sure we understand all the ramifications and responsibilites under the Act.

SSCRA only goes into effect if the person is called into active duty. This applies to loans/debt contracted before the active duty status.

The loan was granted to a person who was in the Reserves. The issue is that he is now claiming relief under SSCRA for a period of service that was 12 YEARS ago! Not sure why he didn't assert his rights at the time. So we need to know if there is a statute of limitations on how long AFTER the service was completed can someone claim refief?

I don't know if this answers your question but Section 590 of Article VII of the SSCRA states "A person may, at any time during his period of military service or within six months thereafter, apply to a court for relief in respect of any obligation or liability incurred by such person prior to his period of military service or in respect of any tax or assessment whether falling due prior to or during his period of military service."

Based on that it sounds like he had six months to make the request. But I would probably run this by an attorney to be sure.

Thanks - in looking further it appears that any statute of limitations would be governed by state law but the SSCRA states that the military service time itself cannot be included in the calculation of time.

It is my understanding from reading an article on bankersonline written by Mary Beth and I quote "the interest rate reduction is automatic; it does not need to be requested by the serviceperson, although as a practical matter their request may be the only way for you to know of their service"

This statement leads me to believe the bank errored in not reducing the rate to 6% during term of service. Obviously the bank did not know of the service until now so the bank could not have reduced the rate than. However, the bank could and in my opinion should reamortize the loan charging 6% during the time of service. To me this does not cure the current default, but would reduce his current balance owed.

Mary Beth's article further states a lender can get relief from the court if they can show the ability of the serviceperson to pay the contract interest rate is not materially affected by their service. Since so much time has elapsed I think the bank might convince a judge their ability to repay during term of service was not materially affected since they made the payments than and so many years later are contending they may have qualified for a reduced rate. Unless the debt is very large or the contract rate is significantly more than 6% the adjustment should not be too large. Of course the time value of money will cause it to grow some over these many years.

I think you need to get good legal advice before pursuing collection efforts.

One of my bank's current loan officers is the one responsible for the big lawsuit stemming from Desert Storm and a business loan. He advised his Board to give in, but they did not and it cost them big time. We exercise extreme caution regarding SSCRA and always favor with the sevicemember.

This is my opinion and not anyone else.

First I'd analyze the costs. It sounds like he is not active duty now and the rate reduction would apply only for the period of active duty. Was that 30 days, 6 months, a year? Certainly it is reasonable to ask for his military orders for that period he now wants to claim. I'd be looking at the statute of limitations at the same time.