WHEN it rains, it pours. When push comes to shove, and your back is up against the wall, you may think of many desperate things that you can do to relieve the enormous emotional and mental stress that you are going through. But I can tell for certain as I have seen literally thousands of my clients in the last couple of decades who have gone through the same circumstances that you are going through right now, and have started fresh anew by simply discharging their debts in bankruptcy, you have a bright future not despite bankruptcy, but because of bankruptcy. Many thank me and say after many years have gone by that filing for bankruptcy was the best thing that they ever did to become productive again. This is very true when they see that it was so easy to rebuild their credit scores every year after filing for bankruptcy. It’s just a matter of timely paying the new credit for houses, cars, and cards that they surely get soon after the court enters their discharge order.
New client comes to see me this week complaining that she has hardly been able to sleep at night. She says “ Attorney, how can I sleep, last week, my employer sends me a letter saying that my wages will be garnished at 25% of my gross pay starting next week. I thought I could live with that but after that, I get another collection lawsuit. Three weeks ago, the IRS levied my checking account for back taxes I owed for 2009 and took $7,000 out of my checking account. I was saving that money for a down payment on a new car because my old car has been breaking down very often. I need a car to do my job as a R.N. because I have a 2nd job seeing patients in their homes on a per diem basis. I’m making good money. I make at least $100,000 a year with 2 jobs. But my husband lost his job when their company downsized. He’s been looking for a job as an electrical engineer for the last two years and has been travelling all over for job interviews in state and out of state, as far as San Francisco and Phoenix, but nobody would hire him because he’s not young anymore. He’s 55 years old. Our eldest daughter is studying to be a nurse practitioner and she will take another two years to finish her degree. We still give her $500 a month to help her out until she graduates and gets a job. Our son graduated as a graphic artist 3 years ago, but can’t get a full time job. We are paying for his car, which is also $500 a month. We can afford to pay our mortgage, which fortunately is only $1,800 because the bank gave us a loan modification last year, but next years our mortgage payment will increase by $400. We pay $1,500 a month of minimum payments to keep our $50,000 of credit card debt current. We try to pay more, but we have been paying for the last 15 years, and we can only afford to pay the interest.”
“Our accountant said that we already paid $250,000 of interest for our credit cards but we still owe $50,000!” “The principal is not going down. Last year, I got into a card accident, which was my fault because I was so sleepy when I was driving home from work at the hospital. I hit a pedestrian on the crosswalk and the insurance did not pay all the damages. So now, I have a judgment of $30,000 for the difference. Sometimes, I feel like giving up. We can’t save any money even if I work so hard.”
I recommended a Chapter 7 bankruptcy to get rid of the civil judgment of $30,000; the back taxes owed to the IRS of $20,000 for the tax year 2009, and the credit card debts of $50,000. The effect of the discharge will free client of further wage garnishments, new collection lawsuits and levies on her bank accounts by the IRS and other creditors as well. I cautioned her about taking new debt, although I said that there is no problem buying a new car after the discharge. Right after discharge, she can qualify for a car loan but the interest will be higher than normal. She will also get new credit cards although with high interest rates.
The important thing, I advised her is that she will have peace of mind and be free of burdensome debt, so she will become productive again with a fresh start in life. With this relief, she will have no problem paying her mortgage when it increases by $400 next year. Hopefully, her husband will get a new job, and all will be well with her and her family.
“Worship Him who made heaven and earth, the sea and springs of water,” Revelation 14:7.
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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 Bldg A-1 Suite 1125 Alhambra, CA 91803.