Business owner seeks to discharge $100k credit cards used to buy business

Clinton beats trump to become first woman president of America
CLIENT is 50. This is his financial picture: He has been working as a truck driver for a furniture company for 15 years. Before that, he worked in the warehouse of that company for 5 years. He is married with a 10-year-old son and a 7-year-old daughter. His wife is a licensed vocational nurse who has gross income of $4,800 a month. They rent a single-family house for $1,800, and pay $520 a month on new E350 Mercedes Benz car lease. Last year, he decided to stop working as a truck driver to become a business owner. The business opportunity presented itself by way of a turnkey franchise. It’s a retail outlet that provides a service to the public. Client also has credit card debt of $100K.
From experience, I know that there has to be some connection between the business and credit card debt. I asked him if he used the credit cards for the business. He said affirmatively that he was required to put a down payment of $50K on the business. What happened was that client used credit cards to pay the $50K down payment? How he was able to do this, escapes me. Apparently, the franchisor operated another company whose purpose is to use buyer’s credit cards to fund the $50K down payment. That’s another story altogether. That’s like going to a car dealer and using ten credit cards to pay for a $50K car. I know there’s some finessing going on because 20 years ago, I offered to use one credit card with a $20K credit line to make a $10K down payment on a car, and the dealer told me that they could only used a max of $2,500 using the card. So this tells me that if you can use credit cards to pay for a $50K car or to make a down payment of $50K to buy a franchise, there has to be a lot of back door finessing going on to actually get money from all the credit cards to total a $50K payment. Let’s just put it mildly as a “grey” area.
In any event, $50K was transferred from client’s credit cards to the franchisor pursuant to a purchase agreement between client, buyer, and franchisor, seller. The total purchase price of the business was $100K. How was client going to pay for the other $50K? It was financed by a promissory note where client agreed to pay $2.5K a month until $50K was paid in full, interest at 12% p.a. Thinking that he had just acquired a very profitable business, client believed that he would have no problem paying himself a salary of $3K, the rent of another $3K, and the monthly payment to the franchisor of $2.5K, plus the $1.5K minimum monthly payments to keep the $50K credit cards current, until the business would be able to rake in profits by the truckloads to pay off the $50K of credit cards.
Eager to become a business tycoon, client opened his store at 7 a.m. and closed it at 7 p.m., seven days a week. In the first month, his gross receipts were a grand total of $3K. In the second month, his gross receipts were $2K. And on the third month, his gross receipts were $4K. After 12 months of hard work, his business was losing an average of $4 to $5K a month. He kept the business afloat by using credit cards to finance the monthly losses. So at the end of 12 months, he owed a total of $100K. But all good things come to an end. He has maxed out his credit cards and there’s nowhere else to borrow money. So now the credit card dogs are barking at the door. They want their pound of flesh. Client then realizes how foolish he was in buying this stupid franchise.
Considering all these circumstances, does client qualify for Chapter 7 relief? Of course, he does. His intent was to pay every single cent of his credit cards from the truckload of profits from the business. Instead, he got truckload of losses. Blame that on his lack of experience in business, not on malice aforethought.
Why will Hillary beat Trump?  Yes, because Americans by and large, are inclusive.  And by and large, Americans are a just and fair people. Americans are made up of different ethnicities from all over the world; who believe in life, liberty and the pursuit of happiness. That’s why America can have a black president for two terms despite the fact that America’s majority is not black. In America, we can talk freely about our ideas, which may differ from each other. I can say don’t vote for Trump because this man is a demagogue. Indeed, if he becomes president of our great nation, a civil war between different American ethnicities could ensue. This is not far fetched when it is the prospective president Trump himself who incites these feelings of hate towards others who look different. That is so fifties and sixties and has no place in America of the 21st century.
Even Pope Francis said that Trump was not Christian in spirit. Even though the Pope did not claim infallibility when he said that, that was a very big negative against Trump. I’m voting for Hillary, she’s my president.
We wait in hope for the Lord; He is our help and our shield.” — Psalm 33:20

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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.

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