financial moves returning reservists need to make
In addition to celebrating a return to home and
family, reservists back from active duty have some tasks to complete to ensure
their financial affairs are in order. The advice comes from the Reserve
Officers Association and employment lawyer Henry Morris Jr., an attorney with
Arent Fox in Washington, D.C.
Check your credit
to the Soldiers and Sailors Civil Relief Act now prohibit both creditors and insurers
from notifying credit agencies, denying credit or changing terms against service
members who exercise their rights under the federal law. To make sure the SSCRA
was followed, get credit reports from all three major credit reporting agencies
and look for any adverse reports added during your time on active duty. If your
credit was revoked because your income declined while you were called up, get
your unit's judge advocate general to write a letter reminding the creditor that
the action was illegal and asking for corrections.
Take a look at your insurance
your policies are in force. A reservist called to active duty is entitled to reinstatement
of any health insurance that was in effect when he or she was called up, even
if a health condition has changed.
If your employment situation
has changed in a way that's not protected by the Uniformed
Services Employment and Reemployment Rights Act, you still are eligible for
COBRA, which allows you to continue to buy your old insurance at lower group rates.
Talk to your former employer.
If your insurer canceled your
homeowners or auto insurance because your circumstances changed (for instance,
you had to leave your home vacant), remind your agent that this is illegal. You
also might want to shop around. An insurer that gives you a hassle under these
circumstances probably won't pay off quickly if you need to make a claim.
Undo any powers of attorney
Write a letter
to anyone to whom you granted power of attorney, revoking it. Even if the person
holding power of attorney is a family member, written notification eliminates
misunderstandings, says Lt. Col. Dennis Veara, judge advocate general for the
Michigan Air National Guard. It is particularly important to take care of this
detail if you are estranged from a spouse to whom you gave power of attorney.
Talk to your creditors
The 6 percent
interest rate available to reservists on active duty ends when your active duty
ends. Your creditor will know that date because it's on the call-up orders that
you submitted when you asked for the rate reduction. If your creditor doesn't
notice right away, you're under no obligation to tell him. But if he notices later,
the creditor can collect interest retroactively, unless you seek forbearance within
30 days because you can't pay. If that's the case, the creditor is obligated to
give you a reprieve that is at least, but not longer than, the amount of time
you were on active duty.
In any case, it's also a good time
to renegotiate your debts. With interest rates at all-time lows and patriotism
high, you might be in a position to get a better deal.
See your lawyer
Legal proceedings such
as bankruptcy, eviction, foreclosure, divorce and civil suits that have been put
on hold will be rescheduled based on the date of return on your orders. If you
need more time, your lawyer will have to petition the court for a stay. Normally
these are granted for a 60-day period.
Pay your taxes
Any income, property or
other taxes that fell due during your period of active duty must be paid within
six months of your return date to avoid penalties.
Review your situation
If you took a cut
in pay during your period of active duty, you are undoubtedly facing some financial
challenges. The best way to get back on your financial feet is to plan and budget.
Bankrate.com offers numerous tips
and strategies on how to manage your cash flow.
L. Phipps is a contributing editor based in Michigan.