Subchapter VII. Further Relief
50 U.S.C. § 4026: Shielding Personal Assets From Business Debts
Official heading: Business or trade obligations
In one line
If your trade or business owes a debt you are personally liable for, your non-business assets cannot be reached to satisfy it during your service. The creditor can ask a court to modify that relief.
Text checked October 9, 2026
What § 4026 does to your money
Small-business owners who are called up often have personally guaranteed business debt. Section 4026 says that if your trade or business, in whatever legal form, has an obligation you are personally liable for, your assets not held in connection with that business are not available to satisfy it during your military service.
Your home, personal accounts and other non-business assets are off the table for that creditor while you serve; the business’s own assets are not. The creditor can apply to a court, which may modify the protection as justice and equity require.
Pair it with § 3937: a business loan you personally guaranteed before service can also qualify for the 6% cap. The site’s business loan guide covers that combination and the documentation lenders ask for. The shield lasts only during military service. Once you are released, the creditor can again reach personal assets under the guarantee, so use the time to restructure the business debt; the guarantee itself is not cancelled. Nor does the section stop the business from being sued or its own assets from being taken.
Guides on this site that apply § 4026
- 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. § 4026
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) Availability of non-business assets to satisfy obligations
If the trade or business (without regard to the form in which such trade or business is carried out) of a servicemember has an obligation or liability for which the servicemember is personally liable, the assets of the servicemember not held in connection with the trade or business may not be available for satisfaction of the obligation or liability during the servicemember's military service.
(b) Relief to obligors
Upon application to a court by the holder of an obligation or liability covered by this section, relief granted by this section to a servicemember may be modified as justice and equity require.
Enacted and amended by: (Oct. 17, 1940, ch. 888, title VII, §706, as added Pub. L. 108-189, §1, Dec. 19, 2003, 117 Stat. 2865.)
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.