WHO would have thought that we would have to go through a pandemic of these proportions in our beloved America during our lifetime? It’s not even mildly implied in the Nostradamus quatrains. Certainly, there was a reference to the September 11 attack by a man in a turban. But nothing mentioned by Nostradamus about 200,000 dead Americans with 6 million infections so far even as operation warp speed promises to deliver a vaccine by November 1, two days before the election. No, that news of vaccine distribution by November 1 has absolutely nothing to do with the November 3 election.
Whatever reference, that any thinking idiot may infer is purely coincidental.
There is no truth to the fact that there are 200,000 dead Americans killed by the virus. I mean, this is the kind of daily gaslighting, we as Americans have to endure every day. It is really exhausting. And, our Black brothers and sisters are still getting shot and killed by law enforcement just because of their skin color. We are reliving the Great Depression, the Spanish flu, and civil unrest all at the same time.
Client makes $100K yearly pre-COVID
This client is young in his mid-30s. Pre-Covid, he was grossing $100,000 a year. That’s pretty good. But post-COVID, in April, he lost his job as an IT manager. He got furloughed permanently. Not long after, his employer folded up. He tried getting another job as an IT manager and sent out hundreds of resumes. He got several interviews conducted by Zoom but none of those became a firm job offer.
Finally, he applied for unemployment benefits and got the maximum of $450 a week. For unknown reasons, the PUA never came through, which would have given him another $600 a week. It’s the luck of the dice. Most PUA goes through very quickly in a day or two, but 10% end up in limbo. That’s just the way it works.
Bills keep coming even as income disappears
Unfortunately, the bills keep coming. Monthly expenses do not stop when your income disappears. When push comes to shove, you have your credit cards to rely on. Just go ahead and use them to the max. The client is about to max out his credit cards at $75,000. His back is against the wall. The rent has to be paid. He got a two-month rent deferment but has to resume rent payment again. You can’t kick the bucket down indefinitely. He’s been using his credit cards for food and to stock up on groceries — the basic necessities of life still continue every single day. Unemployment benefits are simply not enough to live on.
Obviously, he can’t pay any of the minimum payments on the $75,000 credit cards. The EDD money is for surviving this pandemic.
It’s ok to use credit cards to survive this pandemic
So, it’s ok to rely on your credit cards to supplement your income during these extraordinary times. Use them for your food and other necessities. Later on, when the vaccine arrives, which the CDC says is coming before November 3, thanks to operation warp speed and when things get hopefully back to normal and the economy is rebooted and you get your job back, let’s see how we can restructure or get rid of the credit cards that you have maxed out.
In this client’s case, he has decided to discharge the $75,000 with a Chapter 7 petition now. The timing is right because when he gets his job back that pays $100,000 a year, then the option would be reorganization and partial payment of the $75,000 with Chapter 13. If he were back to making $100,000 a year, he would probably pay a portion of the $75,000 over five years since he would not be able to satisfy the chapter 7 means test. That would definitely show a presumption of abuse since he is single and has no dependents. So for him, the timing now is right for a Chapter 7 wipeout of the $75,000 credit cards. That will give him a fresh start in life with no accumulated debt. When he starts making the $100,000 again, he will be able to save a lot of money since he won’t have to debt service $75,000 of cards. That’s at least $2,200 of minimum credit cards payments a month, or a savings of $26,400 a year, or $53,000 in two years! That’s a lot of savings that the young client can start investing in a diversified portfolio or just an index fund and target growth of 6% to 8% a year.
What did Bill Gates say about being born poor? He said if you are born poor, that’s not your mistake. But if you die poor, that’s your mistake. So choose to not die poor is what is he saying. It’s all about making the right choices and decisions at the right time. This is the right time to get rid of the accumulated debt. Seriously. You will not regret it.
* * *
Disclaimer: None of the foregoing is considered legal advice. Each case is different.
* * *
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 20274 Carrey Road, Walnut, CA 91789 or 1000 S. Fremont Ave., Mailstop 58, Building A-10 South Suite 10042, Alhambra, CA 91803.