2012 US Code
Title 50 - War and National Defense
Appendix (§§ 1 - 2420)
SERVICEMEMBERS CIVIL RELIEF ACT (§§ 501 - 597b)
ACT OCT. 17, 1940, CH. 888, 54 STAT. 1178 (§§ 501 - 597b)
Title II - GENERAL RELIEF (§§ 521 - 527)
Section 527 - Maximum rate of interest on debts incurred before military service
Publication Title | United States Code, 2012 Edition, Title 50 - WAR AND NATIONAL DEFENSE |
Category | Bills and Statutes |
Collection | United States Code |
SuDoc Class Number | Y 1.2/5: |
Contained Within | Title 50 - WAR AND NATIONAL DEFENSE TITLE 50 - APPENDIX-WAR AND NATIONAL DEFENSE SERVICEMEMBERS CIVIL RELIEF ACT ACT OCT. 17, 1940, CH. 888, 54 STAT. 1178 TITLE II - GENERAL RELIEF Sec. 527 - Maximum rate of interest on debts incurred before military service |
Contains | section 527 |
Date | 2012 |
Laws in Effect as of Date | January 15, 2013 |
Positive Law | No |
Disposition | standard |
Source Credit | Oct. 17, 1940, ch. 888, title II, §207, as added Pub. L. 108-189, §1, Dec. 19, 2003, 117 Stat. 2844; amended Pub. L. 110-289, div. B, title II, §2203(b), July 30, 2008, 122 Stat. 2849; Pub. L. 110-389, title VIII, §807, Oct. 10, 2008, 122 Stat. 4189; Pub. L. 111-275, title III, §303(b)(1), Oct. 13, 2010, 124 Stat. 2877. |
Statutes at Large References | 54 Stat. 1178 56 Stat. 964 117 Stat. 2844 122 Stat. 2849, 4189 124 Stat. 2877 |
Public Law References | Public Law 108-189, Public Law 110-289, Public Law 110-389, Public Law 111-275 |
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An obligation or liability bearing interest at a rate in excess of 6 percent per year that is incurred by a servicemember, or the servicemember and the servicemember's spouse jointly, before the servicemember enters military service shall not bear interest at a rate in excess of 6 percent—
(A) during the period of military service and one year thereafter, in the case of an obligation or liability consisting of a mortgage, trust deed, or other security in the nature of a mortgage; or
(B) during the period of military service, in the case of any other obligation or liability.
(2) Forgiveness of interest in excess of 6 percentInterest at a rate in excess of 6 percent per year that would otherwise be incurred but for the prohibition in paragraph (1) is forgiven.
(3) Prevention of acceleration of principalThe amount of any periodic payment due from a servicemember under the terms of the instrument that created an obligation or liability covered by this section shall be reduced by the amount of the interest forgiven under paragraph (2) that is allocable to the period for which such payment is made.
(b) Implementation of limitation (1) Written notice to creditorIn order for an obligation or liability of a servicemember to be subject to the interest rate limitation in subsection (a), the servicemember shall provide to the creditor written notice and a copy of the military orders calling the servicemember to military service and any orders further extending military service, not later than 180 days after the date of the servicemember's termination or release from military service.
(2) Limitation effective as of date of order to active dutyUpon receipt of written notice and a copy of orders calling a servicemember to military service, the creditor shall treat the debt in accordance with subsection (a), effective as of the date on which the servicemember is called to military service.
(c) Creditor protectionA court may grant a creditor relief from the limitations of this section if, in the opinion of the court, the ability of the servicemember to pay interest upon the obligation or liability at a rate in excess of 6 percent per year is not materially affected by reason of the servicemember's military service.
(d) DefinitionsIn this section:
(1) InterestThe term “interest” includes service charges, renewal charges, fees, or any other charges (except bona fide insurance) with respect to an obligation or liability.
(2) Obligation or liabilityThe term “obligation or liability” includes an obligation or liability consisting of a mortgage, trust deed, or other security in the nature of a mortgage.
(e) PenaltyWhoever knowingly violates subsection (a) shall be fined as provided in title 18, United States Code, imprisoned for not more than one year, or both.
(Oct. 17, 1940, ch. 888, title II, §207, as added Pub. L. 108–189, §1, Dec. 19, 2003, 117 Stat. 2844; amended Pub. L. 110–289, div. B, title II, §2203(b), July 30, 2008, 122 Stat. 2849; Pub. L. 110–389, title VIII, §807, Oct. 10, 2008, 122 Stat. 4189; Pub. L. 111–275, title III, §303(b)(1), Oct. 13, 2010, 124 Stat. 2877.)
Prior ProvisionsA prior section 527, act Oct. 17, 1940, ch. 888, art. II, §207, as added Oct. 21, 1942, ch. 619, title V, §507(b)(2)(B), 56 Stat. 964, related to limitations prescribed by internal revenue laws as affected by period of service, prior to the general amendment of this Act by Pub. L. 108–189. See section 526 of this Appendix.
Amendments2010—Subsec. (f). Pub. L. 111–275 struck out subsec. (f). Text read as follows: “The penalties provided under subsection (e) are in addition to and do not preclude any other remedy available under law to a person claiming relief under this section, including any award for consequential or punitive damages.”
2008—Subsec. (a)(1). Pub. L. 110–289, §2203(b)(1), substituted “in excess of 6 percent—” for “in excess of 6 percent per year during the period of military service.” and added subpars. (A) and (B).
Subsec. (d). Pub. L. 110–289, §2203(b)(2), added subsec. (d) and struck out former subsec. (d). Prior to amendment, text read as follows: “As used in this section, the term ‘interest’ includes service charges, renewal charges, fees, or any other charges (except bona fide insurance) with respect to an obligation or liability.”
Subsecs. (e), (f). Pub. L. 110–389 added subsecs. (e) and (f).
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