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Debt Consolidation

Back in 2008 I was asked this question at the Fort Dix JRC by a soldier on his way to Iraq. He wanted to know if a debt consolidation loan was covered by the Servicemember’s Civil Relief Act (SCRA)(http://www.servicemembers.gov/scratext.htm). Under the SCRA section 527 interest on loans are reduced to 6 percent. “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 per year during the period of military service.”.
In fact, I am aware of Bankruptcy Court Judge who found that interest on a Chapter 13 plan had to be reduced from 12 to 6 percent.
If you have questions about whether a loan should be reduced to 6 percent, discuss it with JAG. Don’t pass through the MOB site without asking this question. There is no reason to accept the creditor’s word that your interest rate cannot be reduced.