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Servicemembers Facing Debt Collectors and Default Judgments

This guide presents selected U.S. government consumer education from CFPB. References to “we” or “us” in the source material refer to the issuing agency. Source dates and links appear below.

I'm a servicemember and I'm being contacted by a debt collector about a debt. What are my rights and where can I get help?

Depending on your situation, there are different ways to respond to debt collectors. We have sample letters you can use if you're experiencing common problems.

The Fair Debt Collection Practices Act (FDCPA) says debt collectors can't harass, abuse, or mislead you or anyone else they contact. Some examples of illegal conduct are:

  • Calling you repeatedly with intent to annoy or harass
  • Contacting you at an unreasonable time (before 8 a.m. or after 9 p.m., unless you agree)
  • Using obscene language
  • Making false or misleading statements, including about how much you owe
  • Publishing your name for not paying a debt (this does not include reporting information to a credit reporting company)
  • Threatening to have you arrested for not paying the debt

As a servicemember, you may also face some additional debt collection situations. For example:

  • Chain of command. A debt collector can contact your chain of command without your permission but usually only to find out your location, what your phone number is, and where you work. A debt collector trying to locate you cannot tell your supervisor or commander that you owe a debt. Typically, they can only speak to your supervisor or commander once to get your location information, and they can't call if they already have this information.
  • Uniform Code of Military Justice (UCMJ). A debt collector cannot prosecute you under the UCMJ - only the military can do that. However, servicemembers are expected to pay their legitimate financial obligations in a proper and timely manner. Failure to pay a legitimate obligation may result in disciplinary action under the UCMJ, but only if certain conditions are met. For example, there cannot be a genuine dispute between you and the debt collector about the debt.
  • Security clearance. Under the FDCPA, a debt collector is not permitted to share information about your debt without your permission with a third party, such as a security manager, supervisor, or commander. Failing to pay your debts on time can result in negative information being reported to credit reporting companies, which can lower your credit score and may cause your security clearance to be pulled when it is up for review. Servicemembers are expected to pay their legitimate financial obligations in a proper and timely manner.

There are different ways to respond when a debt collector contacts you. Depending on your situation, we have sample letters that can help if you:

  • Need more information about the debt
  • Do not owe the debt
  • Want the debt collector to stop contacting you
  • Want the debt collector to only contact you through your lawyer
  • Want to specify how the debt collector can contact you

You can report any problems to your state's attorney general . You can also sue the debt collector for violations of the FDCPA. If you sue under the FDCPA and win, the debt collector must generally pay your attorney's fees and may also have to pay you damages.

If you have an issue with a consumer financial product or service, you can also submit a complaint with the CFPB online or by calling (855) 411-CFPB (2372). We'll forward your complaint to the company and work to get a response from them.

If you are a servicemember and have a problem with a debt collector, this factsheet has more information about your rights when a debt collector calls. You can also contact your closest legal assistance (JAG) office for more information. You may also get assistance with managing your finances from a counselor at your local military financial readiness program.

I'm a servicemember and I'm being sued. What can I do if I can't make it to court to defend myself or a default judgment is entered because I didn't appear in court?

If you are a servicemember and are sued while on active-duty, you have certain legal protections under the federal Servicemembers Civil Relief Act (SCRA).

The SCRA includes protections from a default judgment in a civil action. A default judgment is a court order in favor of the party or "plaintiff" suing you when you did not appear or defend yourself against the lawsuit. Some of your rights under the SCRA include:

  • Before the court can sign or enter a default judgment, the party suing you must file an affidavit with the court stating whether or not you are in active military service and provide facts in support of that statement. If the party suing you is unable to determine whether you are in active military service, the affidavit must state that fact.
  • If you are in the military and have not appeared in a case against you, the court may not enter a default judgment until it appoints an attorney to represent you.
  • The court must also allow for a stay of proceedings for at least 90 days if certain conditions are met.

If a default judgment is entered against you during your military service or within 60 days after the end of your service, you may be able to have the judgment reopened. An application to reopen the judgment must be filed within 90 days of your release from military service, so if you are notified of a lawsuit, you should immediately contact your closest legal assistance (JAG) office.

If you have an issue with a consumer financial product or service, you can also submit a complaint with the CFPB online or by calling (855) 411-CFPB (2372). We'll forward your complaint to the company and work to get a response from them.

Learn more about your rights under the Servicemembers Civil Relief Act

I'm in the military. Can a debt collector have my security clearance revoked if I fall behind on paying my debt?

No, a debt collector cannot revoke your security clearance. However, failing to pay debts on time can result in negative information on your credit reports and may cause your security clearance to be pulled when it's up for review.

Under the Fair Debt Collection Practices Act (FDCPA), a debt collector is generally not permitted to share information about your debt with a third party, such as a security manager or your chain of command, unless you provide permission.

You should know that failing to pay your debts on time can result in negative information being reported to the credit reporting companies. This can lower your credit score and may cause your security clearance to be pulled when it is up for review. Servicemembers are expected to pay their legitimate financial obligations in a proper and timely manner.

This factsheet also gives more information about your rights when a debt collector calls.

If you're having a problem with a debt collector, contact your local JAG office for more information. To find your JAG Legal Assistance Office, use the locator. You also may be able to get assistance with managing your finances and developing a plan to help you deal with your debt from a local military Personal Financial Manager.

If you believe a debt collector has inappropriately shared debt information or if you have an issue with a consumer financial product or service, you can also submit a complaint with the CFPB online or by calling (855) 411-CFPB (2372). We'll forward your complaint to the company and work to get a response from them.

Sources and publication details

The federal agency source text is U.S. government work in the public domain. Fynoptic selected, adapted, and formatted it for this guide. No agency endorsement is implied. Follow the linked sources for current program details and the rules applicable to your circumstances.

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