Client seeks discharge of $68k credit card debt
CLIENT migrated to the United States when he was 16 years, which was 49 years ago. At 17, he enlisted with the armed forces. He became a corporal in the army. He was stationed in different American bases all over the world working as a mechanic maintaining and repairing heavy equipment. After 20 years he was eligible to retire with a pension from Uncle Sam. Hence, client retired at the young age of 37 with pension. Since he was a hard-working person, and wanted to provide more for his family of 3, having gotten married at the age of 33, with a 3-year-old son, client sought new employment with the city of Los Angeles. At 37, he started working again as a mechanic for the police department. Eventually, he retired from the police department qualifying again for a pension from the City of Los Angeles. Unfortunately, his wife divorced him 12 years ago after she met her high school sweetheart at her high school reunion party. She started having an affair with her old sweetheart for two years until client found out about her affair when he accidentally opened her email. He confronted her with the incriminating emails. She admitted that she had fallen in love again with her old sweetheart and wanted out of the marriage. She filed for divorce and moved in with her boyfriend, leaving client to take care of 11-year-old son who was just about to start middle school.
Since he was still working full-time for the police department at the time of divorce, he asked his parents to take care of his son. Since parents were about to retire, they gladly took care of his son. The divorce decree stated that wife would take care of the community credit card debt of $25K, all joint accounts. Wife started her new life and filed for bankruptcy leaving client with $25K of credit card debt. Client kept the cards current and tried to pay them off but would use the cards to cover gaps in monthly budgets and emergencies. Although he was able to keep the card current, the credit card debt had ballooned to $68K last year, requiring a minimum payment of $2,000 a month, which is more than his mortgage payment of $1,800.
Even with 2 pensions that give him a total of $3,600 monthly, plus $1,400 of social security giving him total retirement income at the age of 67 of $5,000, which is pretty good, the $2,000 of monthly credit card payments is becoming unbearable. 40% of his retirement income is going towards servicing credit card debt. That’s a very bad financial situation to be in at 67. Considering further that he has been paying at least $2,000 a month for his credit card debt just to keep them current for the last 10 years, he has already paid $240,000 of interest just to keep $68,000 of credit cards current, and he still owes the very same $68,000! Client said that he was always trying to pay off all of his credit card debts right after the divorce but unbeknownst to him, the balances kept on getting bigger and bigger. He wanted to have a perfect credit score so he kept on paying the cards on time for the last 10 years. He was not even aware that he had already paid $240K of interest but still owed the very same $68K now that he is 67. That’s not fair but that’s the way those cards work. They drain all your hard earned money, and will keep you in the poor house when you get older, when in fact, you should have invested the money paid for credit card interest into your investment portfolio paying you decent dividends when you retire. In client’s case, instead of paying $240,000 for credit card interest in the last 10 years, he should have just invested that money into an investment portfolio. Even at 4% a year, that $240K would give him income of $800 a month now at 67.
Chapter 7 will wipe out all of the $68,000 credit card debt, allowing him to put $2,000 a month to better use now. He said he does not want to have credit cards anymore. I told him you should have wiped out these cards even five years ago you would still have $120K of savings right now. If you are in a similar situation, come and see me to discuss. A right decision now will save you a fortune and give you a lot of extra income when you retire. It’s your choice. Give your money to keep your cards current, or give your money to yourself and your family and enhance your retirement income.
Federal Court in texas blocks Obama amnesty
The OBAMA AMNESTY which allows people who are here without legal status provided they have a qualifying child who is an American citizen or legal permanent resident, to get a work permit valid for 3 years and renewable for periods of 3 years per renewal is getting into higher gear because the USCIS was directed to start accepting applications by February 19, 2015. People who entered as minors and who graduated from a US high school or obtained a GED also qualify. Applications will be decided by the USCIS on a case-by-case basis. Documented entries with passports and I-94’s, or undocumented entries through the border, or otherwise undocumented, it doesn’t matter as long as AMNESTY requirements are met.
A Federal judge in Texas decided to issue an injunction to stop the implementation of the executive order 3 days ago. The purpose of the injunction is to keep the status quo until the merits of the case are actually heard by the court. President Obama has announced that the Federal government will appeal the matter to the Court of Appeals. This appeal will be to the 5th Circuit, which unfortunately, is predominantly leaning to the Republican agenda. Therefore, the President has also said that he expects to eventually take this matter to the Supreme Court where he expects his executive order to be upheld.
Don’t lose hope. I have no doubt the executive order will eventually be held by the Supreme Court as a valid exercise of executive power. The weight of jurisprudence supports the President’s position. This legal stalemate is a temporary set back, and may even have the positive effect of prodding Congress into enacting a bipartisan immigration reform bill faster this year since the GOP are not actually against immigration reform. What they are upset about is the President going behind their backs and issuing the executive order without consulting them. That’s really all this ruckus is about. In the meantime, I suggest you continue preparing your documentary evidence if you qualify. The President will be vindicated on this one.
“I will sing to the Lord, because He has dealt bountifully with me.” – Psalm 13:6.
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Lawrence Bautista Yang specializes in bankruptcy, business, real estate and civil litigation and has successfully represented more than five thousand clients in California. Please call Angie, Barbara or Jess at (626) 284-1142 for an appointme nt at 1000 S Fremont Ave Mailstop 58 Bldg A-1 Suite 1125 Alhambra, CA 91803.