Repair Your Credit as Soon as You Get Back in the USA

Military service members understand perhaps better than most just how prickly personal finances can be on a budget. But when you get shipped overseas, whether it’s to a combat zone or a secure base it becomes even tougher to stay on top of things. This is why it is not uncommon for U.S. Service Members to return home after deployment to find their credit scores have tanked.
Everyone’s favorite founding father the balding, bespectacled Ben Franklin said it best when he said “An ounce of prevention is worth a pound of cure” which is why if you haven’t shipped out yet it’s wise to consider your options now. Having your financial house in order before you leave requires a little advanced planning and knowing what is expected of you.

Taxes

There are two things that are true about taxes everywhere in the world – everybody pays them and nobody likes doing it! There is a third thing about taxes that only applies to the United States and one other country and that is that you have to pay U.S. income taxes on income earned while you are outside of the U.S. This applies to military personal as well as civilians.
The good news is that service members who are stationed overseas are allowed an extra two months to file, making tax day June 15th rather than April 15th. Military personal are also entitled to some special tax treatments and exemptions. For example if you are deployed to a combat zone and your pay is reported as combat pay it is not subject to federal income taxes.

Payments and Interest

Even though you may be thousands of miles away from your family, friends and most of your worldly possessions loans, credit cards and mortgage payments are still due. Accessing banking while overseas may not always be a simple straight forward proposition like it is at home. The best plan of attack is to arrange for automatic payments to occur while you are away.
Advance planning should also include planning for the unexpected. Emergencies occur, unplanned expenses and forgotten obligations can rear their unsightly heads when you least expect it and are least capable of dealing with them. One way of cutting off the head of this snake before it strikes is to appoint a power of attorney to act on you behalf while you are away.
Power of attorney gives a spouse, family member or trusted friend the legal authority to act on your behalf when you are unavailable or unable to do so. A grant of this power gives the person who has it the ability to do more than check on late or missing payments but to request your credit report, negotiate with creditors and more. In the event that an issue arises that requires a degree of attention in person or on the phone that you are not able to complete a power of attorney holder can.

Lowering Your Interest Rates Through the SCRA

The Servicemembers Civil Relief Act, SCRA. Congress has long sought to protect active sservicemembers finances and credit with the first protections dating to the Civil War. The SCRA however got its current title in 1940 during the run up to World War II. The act’s current state was finalized with amendments in 2003.
SCRA provides protections for soldiers including postponing some civil obligations of military members while on active duty or deployed including:

  • Credit card debt
  • Mortgage payments
  • Pending trials
  • Taxes
  • Terminations of lease

 

It is important to remember that these obligations are not excused only delayed.

Bad Things Still Happen

Even the most thoroughly considered plans sometimes fail to anticipate every possible scenario and your good credit can take a hit. The stresses of deployment, particularly combat deployments, require your utmost attention to doing the job at hand and staying safe resulting in returning home ready to restart your life and being confronted with a mess instead.
Navigating the ins and outs of banks, credit cards, finance companies and others can leave the most seasoned financial wiz kid’s head spinning. Often the best course of action is working with a professional who understands all the intricacies of credit and personal finance to help get you back on track once you’re back in the USA.

Posted in Credit Repair
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