Protection under installment contracts for purchase or lease

Source Credit

(a) Protection upon breach of contract
(1) Protection after entering military service
After a servicemember enters military service, a contract by the servicemember for—
(A) the purchase of real or personal property (including a motor vehicle); or
(B) the lease or bailment of such property,
may not be rescinded or terminated for a breach of terms of the contract occurring before or during that person's military service, nor may the property be repossessed for such breach without a court order.
(2) Applicability
This section applies only to a contract for which a deposit or installment has been paid by the servicemember before the servicemember enters military service.
(b) Misdemeanor
A person who knowingly resumes possession of property in violation of subsection (a), or in violation of section 3918 of this title, or who knowingly attempts to do so, shall be fined as provided in title 18, or imprisoned for not more than one year, or both.
(c) Authority of court
In a hearing based on this section, the court—
(1) may order repayment to the servicemember of all or part of the prior installments or deposits as a condition of terminating the contract and resuming possession of the property;
(2) may, on its own motion, and shall on application by a servicemember when the servicemember's ability to comply with the contract is materially affected by military service, stay the proceedings for a period of time as, in the opinion of the court, justice and equity require; or
(3) may make other disposition as is equitable to preserve the interests of all parties.

History

(Oct. 17, 1940, ch. 888, title III, §302, as added Pub. L. 108–189, §1, Dec. 19, 2003, 117 Stat. 2846; amended Pub. L. 111–275, title III, §303(b)(3), Oct. 13, 2010, 124 Stat. 2878.)

Editorial Notes

Editorial Notes

Codification
Section was formerly classified to section 532 of the former Appendix to this title prior to editorial reclassification and renumbering as this section.

Prior Provisions
A prior section 302 of act Oct. 17, 1940, ch. 888, art. III, 54 Stat. 1182; Oct. 6, 1942, ch. 581, §§9(b), (c), 10, 56 Stat. 771, 772; June 23, 1952, ch. 450, 66 Stat. 151; Pub. L. 102–12, §9(9), (10), Mar. 18, 1991, 105 Stat. 40, related to mortgages and trust deeds, prior to the general amendment of this Act by Pub. L. 108–189. See section 3953 of this title.

Amendments
2010—Subsec. (b). Pub. L. 111–275 amended subsec. (b) generally. Prior to amendment, subsec. (b) related to penalties.

Statutory Notes and Related Subsidiaries

Effective Date
Section applicable to any case not final before Dec. 19, 2003, see section 3 of Pub. L. 108–189, set out as a note under section 3901 of this title.