THE first client is 75 years old. Her husband passed four years ago and left her with $30,000 of credit card debt. She has been making minimum payments on their credit cards for the last 15 years as far as she can recall at the rate of $800 a month. So in one year, she pays about $10,000 of minimum payments to keep the $30,000 current. In 10 years she paid $100,000 to keep them current. In the last 15 years, she has paid $150,000 to keep her credit card masters happy. Mastercard and Visa are very happy with her. They lent her $30,000, 15 years ago. After 15 years she paid them $150,000, and she still owes them the same $30,000! Well, of course, that a great business profit for MasterCard and Visa, right? Borrow $30,000 and pay back $150,000 in 15 years but still owe the same $30,000!
Just imagine the client was only 60 when she got her $30,000 of credit cards with her husband. Now, her husband has gone on ahead of her. Together, they have paid $150,000 on the $30,000 starting at her age of 60. At 75, she has paid $150,000 and still owes the very same $30,000. Nevermind that she could put the $150,000 to much better use now at 75, if she did not owe the $30,000 in the first place. Now that she is retired and receiving a social security payment of $1,300, forking over $800 a month to make these minimum payments to MasterCard and Visa means that 61 percent of her retirement income goes to minimum payments. Now that doesn’t sound good, does it? She rents a room for $500 a month, so just the credit card payments and the rent use up all of the social security of $1,300!
So get this, at 75 she has to get part-time work at Walmart to have money for food and other necessities. Without the $800 paid to credit cards, she literally would not have to work anymore. $800 a month after rent is paid is more than enough for food and other necessities for a single person.
The client has been living this way, until two months ago, when her 2015 Lexus RX330, which she leased for $450 a month was repossessed. She thought she wouldn’t owe Toyota anything since they took the car back. But last week, Toyota sent her notice that she owed them a lease deficiency of $18,000. This, of course, is the proverbial last straw that broke the camel’s back. Mastercard and Visa already take more than half her social security, forcing her to continue working at Walmart at the age of 75, but now owing another $18,000 to Toyota for a car that she has already returned to them and can’t drive anymore, these circumstances put her financial situation into a more accurate perspective. At the age of 75, she needs a complete makeover of her finances.
Chapter 7 will wipe out the $30,000 of credit card debt, and the $18,000 owed to Toyota. She will wipe out $48,000 of debt that she totally doesn’t need to be burdened with at 75. We are talking about the quality of life here. Nobody wants to live like this. Her creditors own her life!
This is no way for anyone to live, no matter what age. I am sure that her beloved husband would agree that they should have filed for Chapter 7 at least 10 years ago, so that now, the client at least would have saved $100,000 in retirement funds instead of being saddled with debt.
Debtor opts for Chapter 7 relief due to health reasons
The second client is still young. She is barely 50. Her husband suffered a stroke two years ago. His hospital bill is $200,000. Well, that obviously is one problem. And he owes about $40,000 of credit cards. That’s another burden you don’t want to have even if you are completely healthy and able to work. She needs $1,200 a month to keep her husband’s $40,000 of credit cards happy and current. The problem is that husband cannot work anymore because of the stroke. Husband is still ok in that he is still able to talk and not paralyzed, but I believe he is depressed because of his condition. He’s a lot younger than I am, but I feel that he’s lost the will to continue living. I feel bad for him and her.
I can help him discharge the $200,000 of medical bills and $40,000 of credit cards. That’s a no-brainer. But I wish I could do more for him healthwise. But that’s now between our Almighty Father in heaven and him. I can suggest that he reads Psalm 91 written by Moses: “Whoever goes to the Lord for safety, whoever remains under the protection of the Almighty, can say to Him, ‘You are my defender and protector. You are my God; in you I trust.’ He will keep you save from all hidden dangers and from all deadly diseases… God says ‘I will save those who love me and will protect those who acknowledge me as Lord. When they call to me, I will answer them; when they are in trouble, I will be with them. I will rescue them and honor them. I will reward them with long life; I will save them.”
If you need debt relief, set an appointment to see me. I will analyze your case personally.
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Disclaimer: The foregoing is an expression of opinion and is not meant to be legal advice to any reader. There is no attorney-client relationship established by this article with the reader. If you want to discuss your situation, you have to set an appointment to consult with the attorney. The first general consultation is free.
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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 appointment at 1000 S. Fremont Ave, Mailstop 58, Building A-1 Suite 1125, Alhambra, CA 91803 or at 20274 Carrey Road, Walnut, CA 91789.