ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Monday, March 10, 1997 TAG: 9703120012
SECTION: MONEY PAGE: 6 EDITION: METRO
SOURCE: MAG POFF THE ROANOKE TIMES
A very difficult pregnancy nearly drove Barbara Porter's family to financial ruin because it threw her out of work temporarily.
But the worst day, the Roanoke County woman said, came in early February. She deposited into her account at Crestar Bank $1,500 in support money for her children, then wrote a $1,400 check for a deposit and first month's rent on a house.
The bank took $1,200 of her deposit to pay toward a bank loan - without letting her know. Her rent check bounced. But for an understanding and patient landlord, she said, her family would have been homeless.
Her bank's action was perfectly legal, she said, but she didn't know that at the time.
Her purpose in telling her story is to warn others who might be laid off that they, too, face such an action if, as is natural, they have a loan and their accounts at the same bank.
Barbara Porter is not her real name because she has to go back to work in April and face her clients. But she and Crestar Bank said the story is true, so she wants other people to know of her predicament.
Cheryl Jenkins, spokeswoman for Crestar, declined to discuss the specific case because of privacy issues.
As a general proposition, Jenkins said, the bank has the right to take the money for a bank debt because of two documents that customers sign.
One is the signature card for checking and savings accounts, which gives the bank the right to seize money on deposit to satisfy a debt to the bank.
The same provision is in the loan document, which many people barely read before signing.
Customers are not notified that the bank intends to take the money because otherwise the customers would not make the deposit, Jenkins said.
Crestar's procedure is not specific to that bank. Jenkins said the practice is general in the industry.
A second marriage was far from Barbara's thoughts when she moved from Alaska back to Southwest Virginia to be with her family.
Besides, her health was not up to par. After losing more than 100 pounds, she had undergone surgery in February 1995 to remove excess skin.
Then she met Steven Proctor, and they were married in December 1995. Barbara, who works in a medically related field, earned $100,000 in 1995 as she usually did. Steven, who works in the insurance business, was paid $29,000.
Early last year, the Proctors took out a $15,000 loan from Crestar, where Steven had maintained several accounts for years. They needed the money to furnish her new office in their home.
A bank official reviewed the highlights of the loan documents but never mentioned the potential for seizing deposits. They didn't read the lengthy papers they signed.
Barbara intended to pay the loan quickly from her generous income, but in March 1996 she found she was going to have a baby, even though doctors had told her that her health would bar a pregnancy.
Soon she was having such serious trouble that the doctors ordered her to stop working. They recommended an abortion, but that ran contrary to her beliefs. Besides, they wanted the baby.
They were, however, reduced to Steven's $29,000 income plus the disability payments of $1,500 a month she receives for her disabled older children. Their debts, on the other hand, were based on income well over $100,000.
She pointed out that anyone who is laid off or loses a job can wind up in the same situation.
They went by the book. Barbara said they wrote every creditor a letter explaining their position. They promised to pay each one a small amount every month until Barbara could return to work.
Even though the creditors agreed, she said, most of them still harassed the couple for more money. Some of them - but not Crestar - even called to threaten Steven's elderly father in Roanoke and Barbara's mother in Wytheville.
Crestar told them in January that it was proceeding to judgment even though Barbara had delivered a healthy daughter the prior month and planned to resume work in April. During that conversation Jan. 31, the bank official in Richmond never mentioned their accounts.
Now with three children, the Proctors needed to rent a bigger house. They moved in early February.
On Feb. 3 or 4, Barbara said, she deposited the $1,500 check for her children and wrote her own check for $1,400 to cover the security and rent on a new house.
The bank official, however, was monitoring the account. He drafted $1,200 of the money toward Crestar's loan. The rent check bounced.
Barbara said the family would have been out on the streets except for the kindness of the landlord's representative, C.W. Francis & Son Inc. That company gave the Proctors more time to make up the money.
She paid Francis $750 in March - using a postal money order as she does now for all of her bills. "We don't have any grocery money for next week," Barbara said.
When she goes back to work in April, despite lingering health problems, Barbara will make up some of the bills. Meanwhile, the bank has its judgment.
Because of the situation, she said, the family plans to file in Bankruptcy Court for a wage-earner plan for repayment of debts. That will give them protection and time to work out their debts.
"This thing has ruined us so badly," Barbara said, because they dropped from affluence and a "sterling" credit record into poverty when she lost her work.
She said she wants every family to be aware that a bank - any bank - can seize what little money customers have in order to satisfy a loan.
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