Businessman considers bankruptcy for $400K lawsuit
I ASKED him if he owed any debts. He said he owed $60K of credit card debt but that they were all still current. I asked him if he was thinking of filing a Chapter 7 petition to wipe out the $60K of credit card debt and the bank levy. He said he was seriously considering it because his minimum payments on the $60K credit cards was almost $2K a month. He has been paying the $2K for the last ten years. So, he’s paid $240K in the last ten years in minimum payments to keep the $60K current in the last decade. But after having paid $240K, he still owes the same $60K! That’s not a good deal for client but a great deal for the credit card companies. That’s why he should have done his Chapter 7 ten years ago and bought instead $240K of visa stock. Check out the price of visa stock in 2007. It was around $20. Now it’s almost $100. So if client had theoretically invested the $240K he saved from discharging his $60K cards in 2007 and used all of the savings to invest in just visa stock, how much would client have today? Well, client would be wealthy today because his visa stock would now be worth $1.0M! Instead of being a millionaire today, client still owes the $60K credit cards and facing a bank levy, wage garnishment and a lien on his car.
I would say that its about time that he should get rid of the ball and chain that is keeping him poor and unproductive since he’s now 68. Client sees the light clear as day now and chooses to file Chapter 7. It’s ten years late but better late than never. When he’s 78, would he rather still owe the same $60K and throw away another $240K of minimum payments in the next ten years? I don’t think so. If he buys the right stock with the savings of $24K every 12 months, he will make himself “great again!”
Client no. 2 is 50 and married. His wife looks a lot younger probably 30. He is a businessman. You know how it is with business people. Sometimes they get into a situation where they can get sued for breach of contract or something similar to that. Client did get sued for $400K and he thinks he can’t win the lawsuit. I don’t know why he thinks he can’t win but apparently he wants a fallback position using bankruptcy to get out of the judgment that he fears so much. I turns out that he has two pieces of real estate with over $1.0M of equity. Well, that’s certainly a problem. I actually told him just to sell those properties now and convert the equity to cash now. At least cash can be easily sent abroad out of the jurisdiction of the United States. That’s a pretty common asset protection move. This is better than transferring title to the properties to someone else under his control because this asset protection move can easily be penetrated. It’s totally not bullet proof. I wasn’t sure exactly what he wanted from me. He said he wanted some kind of assurance from me that bankruptcy would protect his two houses. I said I couldn’t do that because there are too many if and buts about what he wants me to do. Even the judgment, if he loses, can have a finding of fraud which would make the judgment itself not dischargeable. Beside with that much equity, his bankruptcy choices are really limited. He can’t do a Chapter 7. If he did he would certainly lose both properties.
If you need debt relief, set an appointment to see me. I will analyze your case personally.
“WHOEVER GOES TO THE LORD FOR SAFETY, WHOEVER REMAINS UNDER THE PROTECTION OF THE ALMIGHTY, CAN SAY TO HIM, ‘YOU ARE MY DEFNDER AND PROTECTOR. YOU ARE MY GOD;IN YOU I TRUST.’HE WILL KEEP YOU SAFE FROM ALL HIDDEN DANGERS AND FROM ALL DEADLY DESEASES…” PSALM 91 – Authored by Moses!
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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.