THE client is 48, married and has a good job paying him $100,000 gross a year. A family emergency has caused him some financial hardship because money meant to pay for the house and credit cards were used instead for the medical expenses of his brother abroad.
His brother is only 35 and single and lives abroad, waiting his turn to receive his visa to migrate here to the United States. He has another four years to wait. The brother has a good job abroad working as a representative in a call center. He makes about $700 a month. For a single person making $700 a month, and just waiting for his visa to come to the Promised Land, life can’t get much better. No responsibilities; enough money to spend; and good health. What else can a guy ask for? On weekends, he goes scuba diving about 40 miles off the capital. He says it’s very enjoyable because going underwater with a lot of live corals and fish to see is “like traveling to another planet.”
However, lately, brother noticed that his legs were getting “fatter.” The doctor says that his legs are starting to retain water because he has some kind of heart problem. Thoracic and cardiac surgery had to be performed immediately as otherwise his physical condition would rapidly deteriorate and he could very well die from cardiac arrest! Not cool. The brother had no medical insurance to pay for the surgery and medical expenses estimated at $20,000. The family depends on the client for financial help because, at $100,000 gross a year, the client does have the resources to help. And since he loves his younger brother, the client sends the $20,000 by not paying his mortgage and using $10,000 of credit cards. So that’s done. The surgery is performed and brother has a new lease on life. Thanks be to our God Almighty, Yahweh, and His beloved son, Jesus Christ! 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 safe from all hidden dangers and from all deadly diseases. This is what Moses said in Psalm 91 so it is true. Moses was as close as a man could get to our God.
After the family emergency, the client is now behind three mortgage payments and is faced with $20,000 of credit cards. He also owes $5,000 to the IRS for 2016. He has sent this month’s mortgage payment to the bank. But that payment has been returned to him with a notice that the bank will be sending him a notice of default with intent to foreclose soon if he does not send the bank for payment of $12,000.
The best relief for this kind of financial situation is Chapter 13. Why?
First, Chapter 13 will stop the foreclosure process upon filing. So the client does not have to worry about losing his house to foreclosure. Second, the client will be given five years to pay the default of $12,000 without interest. Third, he will also be given five years to pay the $20,000 of credit cards and the $5,000 of back taxes. So, Chapter 13 gives the client a breathing time of five years to handle his mortgage default, his credit cards, and his back taxes. During all this time, the client is immune from all collection efforts of creditors, including foreclosure of house, lawsuits, garnishment, and liens.
Senior seeks Chapter 7 relief for $40K credit cards
The second client is 74. She has been a widow for five years. Her single daughter lives with her and they help each other. Her income is still ok. She receives social security and a work-related pension that gives her a combined gross of $2,400 monthly. She still works full-time as a caregiver and is paid $1,800 gross monthly. So, she has $4,200 monthly. Not too bad. The problem is that she owes $40,000 in credit cards. She needs $1,500 to make minimum monthly payments on these cards, which she has kept for the last 10 years. To make a long story short, she has paid $180,000 on $40,000 of credit cards for the last 10 years but still owes today the same $40,000. This is why Visa is a good stock to own. It makes tons of your money! As a result, everything that she makes from the full-time job goes to pay her credit cards.
Chapter 7 will wipe out all of the $40,000 credit cards so she can start saving her net take-home pay from her caregiving job. It’s about time. At 74, she certainly needs to be able to save all of the money she makes. She really should have filed for Chapter 7 10 years ago. If she did, then she would have $180,000 in the bank saved up today, wouldn’t she?
If you are saddled with debt, now is the time to get them discharged. Better now than later when you are about to retire.
But if you have not yet gotten rid of your debts yet and you are now a senior, believe me, you need to get rid of your debts now that your income is less than half of what it was when you were younger.
If you need bankruptcy relief, please call my office for an appointment and I will analyze your case personally.
* * *
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 Attorney Yang. The first general consultation is free.
* * *
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.