SINGLE MOM SEEKS 2ND BANKRUPTCY RELIEF AFTER 15 YEARS

I remember client the first time I met her 15 years ago. At that time, she was only 30 years old and had just started working as a registered nurse after obtaining her graduate degree in nursing. I won’t tell you how old I was at that time but I certainly wish I were also 30. It’s enough that my beautiful wife, in all sense of the word, still looks 38 now. Client then had a 3-year-old son and a 4-year-old daughter. She had just divorced her husband and was seeking a new start in life with her two young children. Let’s just say that husband was not doing his share in providing for the family, and was prone to the good life where he doesn’t have to work. A little indiscretion here and there that client eventually found out about was the last straw that broke the marriage. Fortunately for client, she had a graduate degree in nursing, young, and at that time there was a big unmet demand for nurses. It was easy for her to get two or three jobs and provide for herself and her two kids without much difficulty except for a lot of hard work. When you think about what a single mom has to do the raise a family all by herself, to discipline the kids and make sure they grow up with the right values and bring in the bacon every single day, that takes a lot of fortitude and determination on the single mom’s part. Most of the time, in situations like these, the ex-husband and father just disappears and does not contribute anything to the broken family. 

Recently she sees me again and wants to file another Chapter 7. Her son is now 18 years old and starting college. Her daughter is 20 years old and also studying to be a nurse. With two children in college, her monthly budget is negative again. She has college expenses to provide for which could easily reach $1,000 a month for the next 4 years. She also has to send some money abroad to her mother and sister since their family home was destroyed by the mega typhoon Haiyan last year. That’s another $500 a month to help rebuild the family home. She showed me pictures of the damage caused by the typhoon. The roof was completely blown away and the insides of the house were a mess. Contractors have submitted quotes to tear down the house and rebuild a new one for $30,000. Believe it or not, client is negotiating with the contractors for installment payments on the construction but at $500 a month, contractors have to agree to a 5-year payment plan. It’s really not that bad considering that the entire locality has been destroyed by the typhoon and people living there have been reduced to living life as refugees. With the local government aid in providing for financial aid to rebuild, a feasible repayment plan is established and construction on the family home has started. But since the $500 from client is an essential part of the payment plan, there is a lot of pressure on her to cover both the college expenses of her children and the rebuilding of the family home. For both endeavors, she must set aside $1,500 a month, otherwise, her children cannot get their college education in a timely manner, and her mother and sister will continue to live like refugees. Both weigh heavily on client who is a good mother and a good daughter as well.

Her income has also decreased by $30,000 a year. Her first job gives her a gross of close to $6,000 a month. After deducting taxes and 401K contributions of $900 a month, her take home pay is about $3,700. Although her rent is quite reasonable at $1,300, a net of $3,700 simply won’t suffice. So, she has to sacrifice her own retirement contribution for the next 5 years. She won’t contribute anything to her 401K for the next 5 years, thus saving $900 a month to pay for college expenses and rebuilding of the family home. She has a car payment for the next two years for a Honda Civic of $375. She can’t sacrifice this expense because she needs a car to get around. Even if she returned this new car to get an older car, the older car will start breaking down and repair costs will mount. That’s an even worse drain on finances. She will discharge $40,000 of credit card debt, thus saving $1,200 a month of minimum payments immediately for a 2nd fresh start in life at the age of 45. She’s on the right track, after 5 years, her children will have their own income, her mother and sister will have the family home, and she can start building up her 401K again at the age of 50. 

 “May the God of hope fill you with all joy and peace as you trust in him, so that you may overflow with hope by the power of the Holy Spirit.”  Romans 15:13.

Lawrence Bautista Yang is a graduate of Georgetown University Law Center and has been in law practice for thirty years.  He specializes in bankruptcy, business and civil litigation and has handled more than five thousand successful bankruptcy cases in California.  He speaks Mandarin and Fujien and looks forward to discussing your case with you personally.  Please call (626) 284-1142 for an appointment at 1000 S Fremont Ave, Mailstop 58, Bldg. A-1 Suite 1125, Alhambra, CA 91803.