Still Fighting the Battle of the Bills : Military: For reservists on active duty, the loss of civilian salaries and benefits is taking a heavy toll on family finances.

In the brief telephone calls from Saudi Arabia, Christy Roemmich says, her husband never fails to bring up the subject.

“He always asks me how the money is holding up,” said the Elk Grove, Calif., woman of conversations with her husband, Michael, a 31-year-old staff sergeant with the California National Guard.

Roemmich responds to the query with a standard “We are fine” and keeps to herself the many financial problems that have arisen since her husband was called to active duty in September.

“Being so far away,” she explained, “he can’t do anything about them anyway.”

The Gulf War ended in a victory for the United States and its allies. But the conflict took a heavy toll on the finances of the more than 225,000 American reservists and National Guard personnel who were called to active duty in the fight against Iraqi President Saddam Hussein.

Despite federal laws and programs designed to ease their financial burden, reservists and their families have depleted savings, skirmished with creditors and been forced to drastically change their lives to accommodate the loss of civilian salaries and benefits.

Both the House and the Senate have passed bills that would beef up the financial relief available to active reservists and their families. But that is of little comfort to the reservists and families whose finances have dried up in recent months.

“Everybody was so ready and willing to accept the good things about fighting the war,” said Richard Cayce, head of the recently founded Reserve Relief Foundation in Richardson, Tex. Yet “many reservists might find a worse war economically at home than they ever fought in the desert.”

The financial predicament has proved a harsh financial lesson for those the war’s outbreak caught deep in debt and short on savings. And the shock has triggered a great deal of soul searching about life styles, along with vows to change spending and savings habits.

“You lose two-thirds of your pay, and all of a sudden you realize that you have all these excesses,” said Larry McKellar, a 43-year-old American Airlines pilot from Dana Point who flies C-141 transports for the 729th Airlift Squadron at Norton Air Force Base in San Bernardino. “It’s been very sobering.”

When Orange County attorney Ernest C. Brown set up a free legal clinic for Gulf military personnel, financial problems were at the heart of most of the requests for help. Reservists and other military personnel faced eviction orders from landlords and collection notices from creditors.

“We have helped 180 people with problems here, and almost all of it’s financially driven,” Brown said.

Many of the difficulties were resolved by turning to the Soldiers and Sailors Civil Relief Act. Under the 1918 law, creditors must limit interest rates to 6% on loans to active military personnel, including reservists.

The law also protects active reservists and their families from being evicted if their rents do not exceed $150 a month. Of course, most rents these days exceed that amount; the ceiling would be increased to $1,200 under proposed legislation.

The act, combined with reservist pay and medical benefits, takes some of the pain out of the call-up. In addition, many employers have made up the difference between a reservist’s civilian and military salary. And numerous lenders have suspended monthly payments entirely for those reservists who cannot afford them.

Such generosity in excess of mandated benefits has helped some part-time soldiers stay solvent.

“The income from the military is not significantly lower--maybe 10%--than what I was making (as a civilian),” said Dan Jones, a 30-year-old assistant engineer for Riverside County who was called up in January to serve as a master sergeant at Norton Air Force Base.

The county paid his full salary for 30 days and will make up the difference between his civilian and military pay for up to five months.

“We haven’t had to buckle down,” said Jones, whose wife recently landed a teaching job at an elementary school. “We knew that it wouldn’t be much of a financial burden on us.”

But the gap between military pay and civilian wages is wide enough in some cases to inflict serious financial harm.

The monthly National Guard paycheck for Sonja Banowetz, a 33-year-old Sacramento-area resident who leads a truck platoon in Saudi Arabia, falls about $1,000 short of her civilian pay. That has has put tremendous pressure on her husband, Dennis, an official with the California National Guard who remained at home.

“I’ve depleted all of our savings and liquidated all of our investments just to pay the bills,” said Dennis Banowetz. In addition, government snafus delayed the arrival of his wife’s first military paycheck for six months, he said.

So Banowetz relied heavily on the Soldiers and Sailors Civil Relief Act. For example, he was able to cut his monthly house payment by 40% when his mortgage lender reduced the interest rate to 6% from 10.5%. In total, Banowetz received up to $500 a month in relief from his creditors.

That is not to say that getting the help was always easy.

It took Banowetz’s mortgage lender three months to cut his payment. Initially, one bank refused to trim the interest rate on a credit card that was in Banowetz’s name, not his wife’s. The bank eventually gave him a lower rate.

However, many reservists complain that the same creditors who have granted them relief later hound them for past-due payments or hire collection agencies.

McKellar, the reserve pilot, and his wife Lisa have become accustomed to finding nasty letters in their mailbox.

“You can’t get too excited about those creditors,” said Lisa McKellar, reflecting on a collection notice the couple received last week. “They’re just not informed. The one thing to do is not to panic.”

The call-up has also resulted in a variety of unexpected financial complications. Many families have been hit by astronomically high phone bills from calling loved ones in Saudi Arabia. Many discovered they cannot file for income tax refunds without their spouses’ power of attorney.

Without the proper documents, for instance, Christy Roemmich was unable to pick her husband’s paycheck from his employer, the Northern California Women’s Prison Facility in Stockton. After weeks of delay, prison officials began advancing Roemmich the check. And her regular doctors don’t accept the medical insurance available to the families of active National Guard personnel.

Despite her problems, Roemmich considers herself fortunate. Her family--parents, siblings and grandparents--have each pledged from $20 to $200 every month to help with expenses. The baby-sitter sometimes works for free, and the preschool has provided weeks of child-care at no cost.

In December, her husband’s co-workers gave Roemmich money to buy Christmas presents. She concedes she spent some of the cash to pay bills too.

Besides obtaining relief from creditors, Roemmich has also changed her habits to deal with the financial crunch. The days of purchasing a pretty blouse or a nice piece of furniture on a whim are over for the former bookkeeper, who had left handling the family finances to her husband.

“I had no idea of the the basic household expenses--insurance, electricity, gas, water and garbage, taxes,” said Roemmich, who works part time as a cosmetics consultant. “I can now really see where the money is and is not. I’ve really learned a great deal of discipline.”

The families of other reservists have also changed their ways.

Lisa McKellar, for example, has given up frequent trips to visit her parents in Texas and now pinches pennies by clipping coupons and buying generic products. Her husband has stored his 1990 Lexus in the garage--to save on insurance and keep the car in good shape should it have to be turned back to the lender--and relies on a 11-year-old Volkswagen Rabbit.

“It’s just excess, living the Orange County life style,” said Lisa McKellar. “It’s not necessary. At the end of this we are planning to move to Florida.”

Dennis Banowetz also plans to make some fundamental financial changes.

“The first thing we are going to do is eliminate all of the credit cards,” he said.

PROTECTING MILITARY FAMILIES

The Soldiers and Sailors Civil Relief Act is designed to ease the transition from civilian life to active duty by protecting armed forces personnel and their dependents from creditors, foreclosures and certain lawsuits. The act applies to all military personnel and their dependents, but the impact of specific provisions may depend on income level. Here are some of the basic protections:

* A lease on a home or apartment may be voided if it was signed before a soldier joined the military.

* It may be possible to reduce interest on loans to 6% while on active duty.

* Civil lawsuits may be put on hold.

* Property being paid for with installment loans may be protected from repossession.

* Foreclosures on homes may be preventable.

* The statute of limitations may be extended. For example, if there was a deadline on a legal claim, that could be extended until the soldier’s return from active duty.

* Veterans rights re-employment law protects the job and benefits of service members.

HOT LINE

The Labor Department has a hot line for reservist and National Guard members with questions about job protection: (800) 442-2VET. Employers with questions can call the National Committee for Employer Support of the Guard and Reserve: (800) 336-4590.