One seeks to discharge $20K and another $30K
WE all go through different stages in life. When you are in your twenties, your whole life is ahead of you. You may be starting a family or starting your career or profession. You’re buying your starter home. If you have children, your whole life is centered on them. This goes on until they turn 18 and start striking out on their own. At that time, you are in your forties. You still feel young and still look young. Maybe you focus on your career more and try to make more money. You might travel the world to see places and people that you have never seen before. You start to incur credit card debt to finance your lifestyle, your version of the American dream. In your fifties, you feel pretty much like you did when you were in your thirties and forties. You actually still look vigorous. Then when you enter the late fifties, you start thinking about providing enough for retirement. You start thinking about your mortality, something, which you never really thought about. You start getting physical problems, maybe hypertension, diabetes, or arthritis. You look at pictures of yourself, and start noticing that your hair is thinning, your hairline receding, your stomach becoming more like a balloon.
Then you enter the sixties. Social security sends you letters showing you why you should not get early retirement at 62, because you will get a lot more if you get your social security at 66, almost 50 percent more, and the amount increases at the rate of 7 percent a year. So you decide to continue working until you can at least get full benefits at 66, which is another 5 years if you’re 61.
My first client retired in 2007 when she was 70. Now she is 77. She was working as a cashier at a dollar store when she retired. At the age of 70, she had credit card debt of $20,000. That required $600 of minimum monthly payments to keep them current. She has kept them current for the last 7 years. So, she has paid a total of $50,400 in the last 7 years to keep the $20K of credit cards current. Yes, her credit cards are current right now but she still owes $20K after having paid $50,400. Doesn’t seem right, so is she hallucinating and should her children send her to the sanitarium for treatment, or should they send her for post-traumatic stress disorder, because that is what she is feeling now as she gets stressed from collection phone calls as late as 11 p.m. This senior client should not be placed in this stressful daily situation now. She should relieve herself completely of that burden. Besides, with social security of $1,000 a month, where will she get $600 a month to keep those cards current for the next 10 years? She’s only renting a room for $400 a month, and she can’t work anymore because she is already physically frail. To even the playing field, client decides to discharge all of the $20K credit card debt with a Chapter 7 petition, which she should have done 7 years ago. She would have saved $50,400, owed nothing to credit cards, and have a credit score of over 700. The minute she decided to file a Chapter 7 petition, she felt total relief from the burden of credit card debt! No more debt, no more harassing collection phone calls; a peaceful retirement at last.
The second client is 55. She is still working as an accountant and makes $60K a year. Her son is 28 and lives with her because he has not been able to get a permanent job since he graduated from college. She co-signed his student loans of $80K. She pays $900 a month for her son’s student loans. She racked up $40K of credit cards since she divorced 8 years ago. Her first mortgage is $2,500, and her HELOC line is $500 a month. She is also paying for her son’s car loan at $500 a month. Her net take home pay is $4K. Not much room left, considering secured debt is claiming $3K a month just for the house and the car. Add $900 for the student loans, and there is nothing left for food. Credit cards require $1,200 a month minimum. There is no money to pay any part of that. Fortunately, son has just gotten an offer to work for a realty management company at $3K a month. But even with son paying his own way for the student loans and his car, client sees no way for her to pay off her credit cards in her lifetime. So, client decides to get rid of all of the $40K credit card debt with a Chapter 7 petition. This is a good decision for her because she will save the $1,200 a month. In one year alone, she will save $14,400, and she will have no debt.
I refer you to ECCLESIASTES 3 – “A time for everything, and a season for every activity under the heavens: A time to be born, a time to die… a time to keep and a time to throw away…” There was a time when one needed the credit cards for whatever reason, but there is also a time to get rid of all of them. And that time is now. Unless you can get a big chunk of free cash from somewhere, the best alternative is to get Chapter 7 relief. You keep all your assets (in most cases), and keep all your income, but you get rid of all your debt and get a fresh start in life, no matter what your age is! Set an appointment to see to see if you qualify. You will feel relief from financial stress and the burden of debt instantly!
“The Lord is my portion,” says my soul,”therefore I have hope in Him.” Lamentations: 3:24.
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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 appointme nt at 1000 S Fremont Ave Mailstop 58 Bldg A-1 Suite 1125 Alhambra, CA 91803.