Awaiting Roosevelt’s signature –
Extension of debt-relief to protect many who fear property will be taken
Protection against property seizure for non-payment of debts incurred up to Pearl Harbor will be extended, possibly this week, to older draft registrants and others who had no reason to suspect being called for service until after the outbreak of war.
Extension of such debt-relief had been authorized by both House and Senate and the bill is now on President Roosevelt’s desk, awaiting only his signature to become law.
Under the old law, draftees and enlistees were protected against repossession only on debts incurred prior to Oct. 17, 1940.
The new law extends that date to Dec. 7, 1941, in the case of a previously-unregistered man. Whether it will extend similar relief to 3-A men and others who didn’t suspect an early Army call has not yet been made clear.
Men past 28 who incurred debts between July 1, 1941, and Dec. 7, 1941, while they were exempted by law from service, will also be granted protection.
In general, the law provides that creditors can’t seize a serviceman’s property without first obtaining court permission. The court may permit such seizure only if it’s convinced the man is able to pay although in service and that no hardship will befall him if he loses the property.
Wherever debts are frozen, with or without court sanction, interest will be limited to 6% regardless of contract provisions.
The new law will also give servicemen three years after the war, instead of just one, to pay off back insurance premiums. And interest on insurance policies will be held to 4%.
It does not affect the present status of servicemen in regard to income taxes. Although men in the service don’t have to pay income tax, they must file income-tax returns if they make sufficient money.
However, men at sea or overseas (including Alaska) do not even have to file a return unless they get back into continental U.S. If they do, then they do not have to file an income-tax return until the 15th of the third month afterward. If they should leave the country in the meantime, they don’t have to worry about the tax return.