Subchapter II. General Relief
50 U.S.C. § 3933: SCRA Relief From Contract Penalties and Fines
Official heading: Fines and penalties under contracts
In one line
Blocks contract penalties from piling up while a case is stayed under this chapter, and lets a court cut or waive a penalty you incurred because service materially affected your ability to perform.
- No penalty accrues for nonperformance of a contract during the period of a stay
Text checked October 9, 2026
What § 3933 does to your money
Late fees, liquidated damages and default penalties keep running during a deployment unless something stops them. Section 3933 does two things. First, when a court stays an action to enforce a contract under the Act, no penalty for failing to comply with that contract accrues during the stay.
Second, if you failed to perform a contract obligation and a fine or penalty resulted, a court may reduce or waive it if you were in military service when it was incurred and service materially affected your ability to perform. “May” means you have to ask, and you carry the burden of tying service to the missed obligation: the orders, the dates, and why you could not pay or perform.
Pair it with the sections that stop penalties before they start. The 6% cap in § 3937 counts fees as interest on pre-service debt, and lease and contract termination under §§ 3955 and 3956 bar early termination charges. In practice the request rides along with a § 3932 stay application or a motion to reopen a default under § 3931, in the same case where the creditor sued for the penalty.
Guides on this site that apply § 3933
- SCRA & Contract Penalties: Fees a Court Can Erase
50 U.S.C. § 3933 stops penalties from piling up during a stay and lets a court waive fines for missed contract terms when military service caused the miss.
- The SCRA and MLA Benefits Most People Never Use
The lawful SCRA and MLA plays servicemembers rarely claim: 6% on your mortgage, penalty-free lease exits, a paused lawsuit, and tax you stop paying.
- What Is the SCRA? The Military Law Worth Thousands a Year
The SCRA (Servicemembers Civil Relief Act) caps pre-service debt at 6%, ends leases on orders, and blocks foreclosure without a court order. How it works.
The full text of 50 U.S.C. § 3933
From the United States Code, 2024 Edition, current through January 6, 2025, as published by the U.S. Government Publishing Office on GovInfo (retrieved October 10, 2026). No amendment enacted after the edition cutoff was found on Cornell LII or in GovInfo’s compiled SCRA (amended through Pub. L. 118-159, Dec. 23, 2024). House style: the Code’s em dashes before a list are shown as colons, and en dashes as hyphens or “to”; no word of the text is changed.
(a) Prohibition of penalties
When an action for compliance with the terms of a contract is stayed pursuant to this chapter, a penalty shall not accrue for failure to comply with the terms of the contract during the period of the stay.
(b) Reduction or waiver of fines or penalties
If a servicemember fails to perform an obligation arising under a contract and a penalty is incurred arising from that nonperformance, a court may reduce or waive the fine or penalty if:
(1) the servicemember was in military service at the time the fine or penalty was incurred; and
(2) the ability of the servicemember to perform the obligation was materially affected by such military service.
Enacted and amended by: (Oct. 17, 1940, ch. 888, title II, §203, as added Pub. L. 108-189, §1, Dec. 19, 2003, 117 Stat. 2843.)
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.
Every section of the Act, including the short administrative ones without their own page, is on the section-by-section index.
Heads up: SCRA Saver publishes general information, not legal or financial advice. Laws change and every situation differs. Confirm details with your installation legal assistance office (free for service members) or a licensed professional.