If your firm files court documents on behalf of creditors, landlords, or servicers, the Servicemembers Civil Relief Act applies to you. Not in the abstract. Directly. Personally. A law firm that files a military status affidavit with a court is the party making the representation. If that affidavit is wrong, the firm has filed a false statement with a federal court, and the attorney who signed it faces criminal liability under 50 U.S.C. Section 3931(c).
This is not a risk that lives exclusively with your client. It lives with you. PRG Real Estate’s outside counsel filed 152 false military status affidavits in Virginia courts. The DOJ settlement cost $1.59 million. Hideaway at Greenbrier and Chase Arbor paid $225,000 after false affidavits led to unlawful evictions. In both cases, someone filed a sworn statement with a court asserting that a defendant was not in the military, without actually verifying.
Law firms occupy a unique position in SCRA compliance. You are the last checkpoint before the court acts. If the client did not verify military status, and your firm files the affidavit anyway, you are the one who introduced the false statement into the judicial record. The SCRA makes this your problem.
This guide covers every SCRA obligation relevant to law firms handling foreclosures, evictions, debt collection litigation, and default judgments. It explains the affidavit requirement, the enforcement record, and how to build a compliance practice that protects both your clients and your firm.
Who the SCRA Protects
The SCRA protects the following individuals during their period of active-duty service:
- Active-duty members of the Army, Navy, Air Force, Marines, Coast Guard, and Space Force
- Activated National Guard and Reserve members (protection begins when they receive orders to report for duty)
- Commissioned officers of the Public Health Service and NOAA
- Dependents of servicemembers in certain circumstances (e.g., foreclosure and eviction protections extend to co-borrowers and co-tenants)
Protection begins on the date a servicemember enters active duty and generally ends on the date of discharge or release. Some provisions extend protections beyond discharge: the foreclosure protection under Section 3953 currently extends for one year after the end of military service, and the repossession protection under Section 3952 also extends beyond active duty.
A critical detail for litigation practice: military status is not static. A defendant who was a civilian when the obligation was incurred may be on active duty when you file. National Guard and Reserve members cycle between civilian and active-duty status throughout the year. A DMDC check run six months ago is not reliable today. Verification must be current at the time of filing.
The Section 3931 Affidavit: The Law Firm’s Primary Obligation
What the Statute Requires
50 U.S.C. Section 3931 establishes the foundational SCRA requirement for all civil litigation. Before any court can enter a default judgment against a defendant, the plaintiff must file an affidavit with the court stating one of the following:
- The defendant is not in military service
- The defendant is in military service
- The plaintiff is unable to determine whether the defendant is in military service
The affidavit must be based on actual investigation, not assumption. The statute requires that the affiant set forth “facts supporting the affidavit.” Checking a box is not sufficient. The court expects the plaintiff to have taken concrete steps to ascertain the defendant’s military status.
The Criminal Penalty
Section 3931(c) makes it a federal crime to knowingly file a false military status affidavit. The statute reads: “A person who makes or uses an affidavit permitted under this section (whether or not required) knowing it to be false, shall be fined as provided in title 18, or imprisoned for not more than one year, or both.”
This is a criminal penalty. It applies to the person who makes or uses the affidavit. For law firms, that person is the attorney who signs and files it.
What Happens When the Defendant Is on Active Duty
If the affidavit states that the defendant is in military service, or if the court cannot determine the defendant’s military status, the court must take additional steps before entering any judgment:
- Appoint an attorney to represent the absent servicemember (Section 3931(b)(2))
- Grant a stay of at least 90 days if the appointed attorney requests one or the court determines one is needed (Section 3932)
- Require the plaintiff to post a bond if the court cannot determine military status, to indemnify the defendant against any loss from a wrongful default judgment
The Practical Standard: DMDC Verification
The Defense Manpower Data Center (DMDC) operates the authoritative federal database for military status verification at scra.dmdc.osd.mil. This is the source the DOJ uses in every SCRA enforcement action. When the DOJ investigates whether a company or law firm properly verified military status, the DOJ checks what DMDC showed on the date in question.
For law firms, the standard of care is clear: run the DMDC check before every filing that could result in a default judgment, and attach the DMDC result to your affidavit. This demonstrates that the affidavit is based on actual verification, not guesswork, and creates a documented record of good faith.
Foreclosure Representation (50 U.S.C. Section 3953)
The Protection
Section 3953 prohibits foreclosure on a servicemember’s property during their period of military service and for one year after the end of military service, except by court order. This applies to obligations originated before military service where the servicemember is the mortgagor. It applies in both judicial and non-judicial foreclosure states.
What This Means for Law Firms
If your firm represents a lender or servicer in foreclosure proceedings, you must verify the borrower’s military status through DMDC before initiating any foreclosure action. If the borrower is on active duty or within the one-year post-service protection period, your client cannot proceed without a court order, regardless of the foreclosure mechanism available under state law.
When petitioning the court for permission to foreclose on a protected servicemember, the court may:
- Stay the proceedings for at least 90 days if military service materially affects the servicemember’s ability to meet the obligation
- Appoint counsel to represent the servicemember if they cannot appear
- Adjust the terms of the mortgage obligation
- Require the lender to demonstrate that military service has not materially affected the servicemember’s ability to pay
The servicemember has the right to appear and be heard. Your firm’s role is to ensure that your client’s foreclosure action complies with Section 3953 before it is filed, not after a court or the DOJ raises the issue.
The Enforcement Record
In 2012, the DOJ announced the largest coordinated SCRA enforcement action in history. Five major banks paid a combined $135 million for foreclosing on active-duty servicemembers’ homes without court orders: Bank of America ($35 million), JPMorgan Chase ($31 million), Wells Fargo ($28.4 million), Citi ($14.9 million), and GMAC/Ally Financial ($13.7 million). Law firms involved in these foreclosure proceedings filed military status affidavits for every case. In every case, the affidavit failed to identify the borrower as protected.
Eviction Representation (50 U.S.C. Section 3951)
The Protection
Section 3951 prohibits eviction of a servicemember or their dependents from their primary residence without a court order during active duty. This applies when the monthly rent does not exceed the statutory threshold, which is adjusted annually by the Secretary of Housing and Urban Development.
What This Means for Law Firms
If your firm represents landlords or property management companies in eviction proceedings, you must verify the tenant’s military status through DMDC before filing. If the tenant is on active duty and the rent is within the statutory threshold, your client cannot evict without a court order, and the court must determine whether military service materially affects the tenant’s ability to pay rent.
Self-help eviction (changing locks, removing belongings, shutting off utilities) is prohibited for protected servicemembers regardless of state law provisions that may permit it for non-military tenants.
The Enforcement Record
PRG Real Estate Management obtained 152 default judgments against 127 servicemembers in Virginia courts from 2006 to 2017. In each case, PRG either stated that the tenant was not in the military or failed to accurately disclose the tenant’s military status. The courts entered default judgments based on false information. The DOJ settlement: $1.59 million.
Hideaway at Greenbrier and Chase Arbor paid $225,000 after filing false military status affidavits and carrying out unlawful evictions against servicemembers in Virginia courts. The pattern is the same: affidavits filed without DMDC verification, courts acted on false information, servicemembers lost their homes.
In both cases, someone signed an affidavit and filed it with a court. That someone faced liability under Section 3931(c).
Collection Litigation
Interest Rate Cap (50 U.S.C. Section 3937)
When your firm pursues collection of debts incurred before military service, the interest rate cap applies. Interest on pre-service obligations cannot exceed 6% per year during the period of active duty. This applies to all pre-service debts: mortgages, auto loans, credit cards, personal loans, and any other obligation.
If a servicemember or their counsel raises the rate cap in response to your collection action, the creditor must reduce the rate to 6%, forgive (not defer) the excess interest retroactively to the date the servicemember entered active duty, and recalculate the amount owed. The creditor’s alternative is to petition the court under Section 3937(c) to demonstrate that military service has not materially affected the servicemember’s ability to pay.
Your firm must advise clients of these obligations when accepting collection matters. Filing a collection action for an amount that includes interest above 6% on a pre-service obligation owed by an active-duty servicemember is filing an incorrect claim.
Repossession Holds (50 U.S.C. Section 3952)
If your firm represents creditors in repossession or replevin actions on installment contracts (vehicles, furniture, equipment), Section 3952 requires a court order before repossession when the contract was entered before military service and the servicemember made at least one payment before service.
Your firm must verify military status before filing. If the servicemember is protected, the court filing must comply with Section 3952 procedures, including the servicemember’s right to appear and the court’s authority to stay the action.
Stay of Proceedings (50 U.S.C. Section 3932)
A servicemember who is a defendant in any civil proceeding may request a stay of at least 90 days if military service materially affects their ability to appear. The court must grant the initial stay upon proper application. Additional stays may be granted at the court’s discretion.
Your firm should anticipate stay requests in any matter where the defendant may be on active duty. Case timelines must account for mandatory stays. Opposing a mandatory stay under Section 3932 exposes the firm to sanctions and the client to SCRA liability.
DMDC Verification: The Authoritative Source
The Defense Manpower Data Center (DMDC) operates the official database for military status verification at scra.dmdc.osd.mil.
How It Works
You submit identifying information (name, Social Security number, date of birth) and DMDC returns whether the individual is currently on active duty, along with service dates.
When Law Firms Must Verify
- Before every default judgment filing: The Section 3931 affidavit must be based on actual verification
- Before every foreclosure initiation: Section 3953 requires verification before proceeding
- Before every eviction filing: Section 3951 prohibits eviction without court order for protected servicemembers
- Before every repossession action: Section 3952 requires court order for covered servicemembers
- Before every collection action: To determine if the interest rate cap applies and to calculate the correct amount owed
- At the time of filing, not weeks before: Military status changes. A check run 30 days before filing may not reflect current status
The Documentation Standard
Run the DMDC check. Save the result. Attach it to the military status affidavit. Reference the date and result in the body of the affidavit. This creates a documented record that demonstrates good faith, satisfies the court, and protects the firm if the result was accurate at the time of verification.
Multi-Client Portfolio Screening
Law firms handling volume litigation (foreclosure mills, bulk eviction practices, high-volume collections) face a scale problem. Filing 500 evictions per month means running 500 DMDC checks per month, documenting 500 results, and attaching 500 verifications to 500 affidavits.
Why This Matters
The PRG Real Estate case involved 152 false affidavits. That number did not accumulate through careful review. It accumulated through a high-volume eviction practice where military status verification was either not performed or performed incorrectly at scale. When the process is manual, and the volume is high, errors compound. One missed check per week becomes 50 per year.
The Manual Process Breaks at Scale
Manual DMDC verification (logging into scra.dmdc.osd.mil, entering names individually) works for a firm handling 10 cases. It does not work for a firm handling 500. The risks are the same ones that have caused every SCRA enforcement action:
- Checks get skipped. When someone is entering names one at a time, deadline pressure creates an incentive to skip.
- Results are not documented. A paralegal who checks the DMDC portal and moves on to the next task does not always save and file the result.
- Timing gaps emerge. A check run during case intake may be stale by the time the affidavit is filed weeks later.
Batch Verification
Automated batch screening allows firms to submit entire case portfolios for DMDC verification simultaneously. Every defendant is checked. Every result is documented. Every verification is timestamped and associated with the specific case. The firm can demonstrate that every affidavit was supported by a current DMDC result.
This is particularly important for firms that handle multiple client portfolios. A firm representing 20 landlords across 200 properties must verify every tenant before every filing, regardless of which client is involved.
Documentation and Audit Trail Requirements
What to Document
For every case where a military status affidavit is filed:
- DMDC verification result: Date, query parameters, result, who ran it or what system generated it
- Affidavit: Copy of the filed affidavit, with DMDC result attached or referenced
- Court filings: All documents filed, orders received, appointed counsel communications
- Client communications: Advice given regarding SCRA obligations, client instructions received
- Status changes: If the defendant’s military status changes during the case, updated verification and any changes to the litigation strategy
Retention
Retain all SCRA-related case documentation for a minimum of 5-7 years. DOJ consent decrees require 3-5 years, but the statute of limitations for private SCRA lawsuits and malpractice claims can extend further. The safest practice is to retain SCRA records for the full period of your firm’s standard document retention policy or 7 years, whichever is longer.
The Malpractice Dimension
A law firm that files a false military status affidavit faces not only criminal liability under Section 3931(c) and potential DOJ enforcement, but also malpractice exposure from the client. If the DOJ imposes a settlement on your client for SCRA violations, and your firm filed the affidavits, the client’s first question will be whether the firm verified military status before filing. Your documentation is your defense.
Enforcement Actions Involving Law Firm Conduct
The DOJ has not brought enforcement actions naming law firms as defendants (the actions target the creditors and landlords who are the plaintiffs in the underlying litigation). But the conduct that triggered these settlements was the filing of false affidavits, an act performed by attorneys.
| Case | Year | Settlement | Violation | Affidavits |
|---|---|---|---|---|
| PRG Real Estate Management | 2019 | $1,590,000 | 152 false military status affidavits, 152 unlawful default judgments | 152 |
| Hideaway at Greenbrier / Chase Arbor | 2022 | $225,000 | False affidavits, unlawful evictions | Multiple |
| Lincoln Military Housing | 2016 | $200,000 | Filed false affidavits denying tenants were active-duty military | Multiple |
The Pattern
Every case follows the same sequence:
- A creditor or landlord initiates a civil action against a defendant
- The plaintiff (or the plaintiff’s counsel) files a military status affidavit stating the defendant is not in the military
- The affidavit is wrong because no one actually checked DMDC
- The court enters a default judgment based on the false affidavit
- The DOJ investigates, typically triggered by a complaint from a military legal assistance office
- The settlement requires restitution, DMDC verification going forward, written policies, and monitoring
The law firm is present at step 2. That is the step where the violation is created. Everything that follows is a consequence of that filing.
Building a Compliance Practice
1. Firm-Wide Verification Policy
Adopt a written policy requiring DMDC verification before filing any document that includes a military status representation. The policy should cover:
- All case types: Foreclosure, eviction, collection, repossession, deficiency judgment, any civil action where a default judgment is possible
- Timing: Verification must be current at the time of filing, not at the time of case intake
- Documentation: Every DMDC result saved and associated with the case file
- Responsibility: Define who runs the check (paralegal, case manager, automated system) and who reviews the result before signing the affidavit
- Escalation: When a defendant is identified as active duty, the case is routed to an attorney for SCRA-specific review before any filing proceeds
2. Attorney Training
Every attorney and paralegal who handles civil litigation where default judgments are possible must understand:
- The Section 3931 affidavit requirement and its criminal penalty
- The SCRA protections that apply to each practice area: foreclosure (Section 3953), eviction (Section 3951), repossession (Section 3952), interest rate cap (Section 3937), stay of proceedings (Section 3932)
- How to run a DMDC verification and interpret the result
- How to handle a case where the defendant is identified as active duty: appointed counsel, stay procedures, court order requirements
- The firm’s verification policy and documentation requirements
Training should occur at hire and annually. Document who was trained, when, and on what content.
3. Case Management Integration
Integrate DMDC verification into your case management workflow so it is a required step, not an optional one. The check should be:
- Mandatory: The system should not allow an affidavit to be generated without a current DMDC result on file
- Timestamped: The DMDC result should be dated and associated with the specific filing
- Visible: The DMDC result should be part of the case file, reviewable by any attorney on the matter
- Auditable: The firm should be able to produce a report showing every DMDC check run, for every case, for any time period
4. Client Advisory
When accepting foreclosure, eviction, or collection matters from clients, advise them of their SCRA obligations. Many clients are unaware of the SCRA or assume it only applies to military-specific contexts. Your firm should:
- Include SCRA obligations in engagement letters for relevant practice areas
- Advise clients to verify military status before referring matters for litigation
- Inform clients that SCRA compliance may extend case timelines due to mandatory stays
- Explain that the firm will not file a military status affidavit without a current DMDC verification
5. Periodic Self-Assessment
Audit a sample of filed affidavits quarterly:
- Was a DMDC check run before every filing?
- Was the DMDC result current at the time of filing?
- Was the result documented in the case file?
- Were any defendants identified as active duty? If so, were SCRA procedures followed?
Track the compliance rate. It should be 100%. Any gap represents a case where a false affidavit may have been filed.
The Cost of Non-Compliance
For law firms, the cost is not just monetary. It is reputational and professional.
Direct exposure:
- Criminal liability under Section 3931(c) for false affidavits (fine and up to one year imprisonment)
- Malpractice claims from clients who face DOJ enforcement
- Bar discipline for attorneys who file false statements with courts
- DOJ investigation of the firm’s practices
Client exposure (which becomes the firm’s problem):
- $1.59 million (PRG Real Estate)
- $225,000 (Hideaway at Greenbrier / Chase Arbor)
- $200,000 (Lincoln Military Housing)
- Multi-year DOJ monitoring
- Credit repair obligations for affected servicemembers
Compliance costs:
- DMDC verification: free
- Written policy: staff time to draft and review
- Training: 1-2 hours per attorney and paralegal annually
- Automated verification tools: a fraction of a single malpractice claim
The calculus is straightforward. A DMDC check takes minutes. A DOJ investigation takes years.
Next Steps
- Assess your current practice: Review your firm’s military status verification procedures. Are DMDC checks performed before every filing? Are results documented? Is there a written policy?
- Train your attorneys and staff: Ensure every attorney and paralegal handling civil litigation understands Section 3931 and the criminal penalty for false affidavits
- Review enforcement actions: See every DOJ settlement on our SCRA Enforcement Tracker (civrel.io/enforcement)
- Automate verification: civrel.io replaces manual DMDC lookups with automated verification integrated into your case management workflow, with audit-ready documentation for every filing
Sources: DOJ Press Releases and Consent Decrees (justice.gov/servicemembers/cases); 50 U.S.C. Sections 3901-4043; DOJ-CFPB Joint Warning Letter (December 2024).
This guide is for educational purposes only and does not constitute legal advice. Consult qualified legal counsel for guidance specific to your organization.
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