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Bankruptcy and Members of the Military


Protection Against Entry of Default Judgments

The SCRA establishes certain procedures that must be followed in all civil proceedings in order to protect servicemember defendants against the entry of default judgements. If a defendant is in default for failure to appear in the action filed by the plaintiff, the plaintiff must file an affidavit1 with the court before a default judgment may be entered. The affidavit must state whether the defendant is in the military, or that the plaintiff was unable to determine whether the defendant is in the military. The court may not order entry of judgment against the defendant if the defendant is in the military until after the court appoints an attorney to represent the defendant. If requested by counsel for a servicemember defendant, or upon the court's own motion, the court will grant a stay of proceedings for no less than 90 days if it determines that (1) there may be a defense and the defense cannot be presented without the defendant's presence; or (2) after due diligence the defendant's attorney has not been able to contact the defendant or otherwise determine if a meritorious defense exists. The court may, in its discretion, make further orders or enter further judgments to protect the rights of the defendant under the SCRA.

Stay of Proceedings Where Servicemember has Notice

Outside the default context, and at any time before final judgement in a civil action, a person covered by the SCRA who has received notice of a proceeding may ask the court to stay the proceeding. The court may also order a stay on its own motion. Id. The court will grant the servicemember's stay application and will stay the proceeding for at least 90 days if the application includes: (1) a letter or other communication setting forth facts demonstrating that the individual's current military duty requirements materially affect the servicemember's ability to appear along with a date when the servicemember will be able to appear; and (2) a letter or other communication from the servicemember's commanding officer stating that the servicemember's current military duty prevents his or her appearance and that military leave is not authorized for the servicemember at the time of the letter. The court has discretion to grant additional stays upon further application.

From the Administrative Office of the U.S. Courts


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