Chapter 7 to discharge credit cards, loans

CLIENT is 64, a young senior. I say young because I consider seniors in their sixties as still active and robust. Except for more white hair, they still feel like they are 30. The problem with being in the sixties is that seventy is just around the corner. Now when one becomes 70, after ten years you become 80. In your eighties, your hoping that Putin’s anti aging pill is already in commercial production. Putin is 64 right now, just like client. He has a pharmaceutical company in Russia that is doing in depth research on mitochondria cells that focus on delaying aging and extending human life to 130. So, maybe this is why PEOTUS Trump wants to be his best friend. I wouldn’t mind being his best friend either if the Russian company actually makes this pill available for humans in the next 10 or even 20 years, I might still be around to benefit from it.
Client says that his net income is $3,500 and that he is separated from his wife. His rent is $600 for a room. He sends money to his brothers and sisters in his country of origin. The problem is that he owes $30K of credit card debt. He pays minimum of $1K a month for the credit cards. He also has a car payment of $350. We don’t have to do more calculation here. The minimum payment of $1K for credit cards is almost a third of his next income. That is just way too much. He wants to get rid of his credit cards now that he is 64 so he can start saving some money. Well, it’s a little late to start saying money now but at least with the discharge of all of his credit cards, he can save $12K in the next 12 months, and $24K next year, then $36K then $48K. So when he turns 69, just before he becomes 70, he can have $50K saved up which he can use any way he wants. This is a lot better than keeping these cards, paying them $50K for the next 4 years, then still owe them the same principal of $30K when he turns 70. So, this is really a no brainer, isn’t it? Would he rather have $50K in cash and not owe anything at the age of 69, or throw away $50K in minimum payments and still owe $30K credit cards at age 69?
He asks if his brother whom he used as reference for a personal loan who did not sign a personal guaranty is legally liable for his debt if it is discharged in bankruptcy; of course not. Brother can only be made liable for his debt if brother signed a written personal guaranty. Without a signed personal guaranty, brother used a reference, cannot be sued because he has no legal liability to the creditor of client.
Next client are husband and wife who are 72 and 71. Wife made sure that I understood that she was only 71 and one year younger than her husband who is 72. Yes, I got that. One year makes all the difference. I told her that I stopped counting 20 years ago and advised her to do the same. It’s useless to keep counting, what’s the big deal anyway? Who wants to know that you are now one year closer to leaving this earth; certainly not yourself. Look at the picture of the Indonesian guy who is the oldest man alive at 145. I mean what can you do at 145? You’re practically a cadaver and blind. Can’t hear anything. Quality of life is just zilch.
Clients owe $46K of credit card. Their social security is $3K a month. Rent is at $1200. They have $1800 left but their credit cards need minimum of $1500. How are they going to eat and pay for other necessities if they continue to pay $1500 for credit cards? They can grow their own vegetables in their backyard, if they had a backyard. They rent an apartment with no backyard. Husband says that he has all kinds of muscle pain and has a pacemaker, so that kills his plan to drive for UBER so he can raise another $1500 to pay for their credit cards. He says they have already lived a full life, having travelled all over the world, using the cards. But they have paid the cards for the last 20 years a total of $360K yet they still owe the very same $46K of credit cards today. I told them that they should have done their Chapter 7 twenty years ago, so today they would have $360K in their portfolio earning them at least 5 percent or $1500 a month, or $18K a year. That certainly helps now, instead of paying them a small fortune and still owing them the same amount of $46K. Should have gotten rid of these cards a long time ago.
They decide immediately to file for Chapter 7 to discharge the $46K of credit cards. Peace of mind without credit card payments is what they need now at 72 and 71.
Last client were business owners. They are also seniors at 60 and 61. The owned a business that closed down in 2007. When the business closed, the company, which is an S corporation, owed an SBA loan of $49K, which is now $89K because of the accrued interest. SBA started to garnish wife’s wages last week. She didn’t like the garnishment. Can’t blame her, who wants to get your hard earned wages taken at the rate of 25 percent of gross. As PEOTUS says that is a “bigly” deduction, NOT FAIR! And NOT NICE! In addition, they owe $90K of credit card debt plus another $30K of unsecured business debt. They ask if it makes sense to settle the accounts owed. I say what for? With a Chapter 7, you can wipe out all of the $210K debt, start fresh again with zero debt, all it costs is the attorney & filing fees, which are very reasonable. Settlement at half for instance, would still cost $120K, which they don’t have. I mean, settlement is very expensive compared to Chapter 7 legal fees. You wipe out $240K for almost not cost except legal fees. That’s the American way. Look at PEOTUS, his companies filed bankruptcy four times and he still the president elect. That is one smart dude. VERY SMART!
“Jesus Christ is the same yesterday, today, and forever.” — Hebrews 13:8

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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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