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2) Fred Smith enlists in the U.S. Army. Two months after being sworn into active
duty Fred decides to purchase a new car. Neither Fred nor his wife or other
dependents is covered by the Act for this purchase.

Simply stated, if the purchase is PRIOR to being sworn in to active duty or reporting for
military reserve active duty, the Act will apply. If the collateral is purchased AFTER
being sworn in to active duty, the Act will not apply.

Should a default on a loan occur on a military service member, it is best addressed by the
creditor’s legal staff. A Wrongful Repossession under the SCRA is a crime with a
possible punishment of up to one year in jail.

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