EX-BUSINESSMAN WITH COMMERCIAL LEASE JUDGMENT OF $100K SEEKS CHP 7 RELIEF; SENIORS SEEK CHP 7 DISCHARGE OF $50K CREDIT CARDS

EX-BUSINESSMAN WITH COMMERCIAL LEASE JUDGMENT OF $100K SEEKS CHP 7 RELIEF;

SENIORS SEEK CHP 7 DISCHARGE OF $50K CREDIT CARDS

Client is 50, divorced and used to own a business that had a commercial lease for retail space. He operated the business for 10 years. On the 11th year, sales started to plunge for unknown reason such that debtor could no longer pay the commercial lease of his retail space. He still had 2 years of lease to go at $4k per month. So for 24 months, he owed close to $100K of commercial lease. But since his business was not even able to generate enough sales to cover rent, he had to close shop and get his stuff out of the building. He cleaned out the space, thinking that if the landlord could easily rent it out, he would not sue him for unpaid rent of two years.

Unfortunately, landlord sued client for unpaid rent of $100K. Eventually, landlord got a judgment for $100K against client. But client now is an ordinary employee making $4K a month of salary. There is a notice of bank levy on his bank accounts for $100K, and a notice of wage garnishment on his salary for $100K! In addition to this significant liability, client owes $20K of credit card debt.

With a bank levy on his accounts and the prospect of losing 25% of his salary to wage garnishment for unpaid commercial lease of his old business that no longer exists, client decides to seek Chapter 7 relief. What will Chapter 7 do for him?

With Chapter 7, he can keep all of his assets, and he can discharge or get rid of the $100K judgment, dissolve the bank levy and dissolve the wage garnishment. He can also wipe out the $20K of credit card debt. In other words, he can get a fresh start in life and be productive again. He can leave his old life behind him and forget about the $100K he owes his landlord as well as his $20K of credit cards.

His credit score will improve yearly. At the end of this year, he will be close to 600. In year two, he will score 640, in year 3, 680, and on year 7, he will cross 730. In year ten, there will be no record of his Chapter 7 and his credit score will be over 800. Best of all, he can look forward to retiring by having the ability to start saving money now and not having to worry about paying a $100K judgment of $20K of credit cards. He will be able to get new credit cards in year one because there are credit card companies that specialize in giving credit to people who have just filed bankruptcy. They are indeed good credit risks because they cannot file another Chapter 7 for 8 years.

Next client is 66. He stopped working last year and now gets social security of $1,200 and a pension of $800. His wife is 68 and collects social security of $900. So they have $2900 a month of social security and pension. They don’t own a house so they rent for $800. Medicare standard and part D gets a portion of their income but they don’t have to pay for prescription drugs anymore as part D covers all of their medication. They are both in good health so that’s pretty good. The only problem is that they both owe a total of $50K of credit cards. They need $1500 a month of minimum payments to keep these cards current, and all of the cards are still current. Their son helps them pay for the cards. What a waste of money!

Credit card minimum payments eat up more than 50% of their retirement income! “BAD” as Pres. Trump would tweet. In fact, “Bigly-Bad!!” What can Chapter 7 do for them?

Chapter 7 will wipe out all of their $50K of credit card debt, thus saving them the headache of paying out $1500 a month to keep these cards current. This saves them $18K a year. In 3 years they save almost $60K. What can they do with $60K of savings? Well, they can invest it in equities and maybe get a decent return of 6% a year. That’s income of $3,600 a year, or $300 a month of extra money to spend. That’s not too bad considering they are just starting to save money now. If they filed for Chapter 7 ten years ago, they would have at least $200K now saved up and giving them $1K a month of income. Or, they can travel the world with their savings and additional income.

No matter what your age is right now, if you have accumulated debt that has become burdensome for you and your family, seriously consider wiping out your debt now than waiting for 5 more or 10 more years when you retire. You will save a lot of money by getting rid of your accumulated now than later.

If you need debt relief, set an appointment to see me. I will analyze your case personally.

“TRUST IN HIM AT ALL TIMES, O PEOPLE; POUR OUT YOUR HEARTS TO HIM, FOR GOD IS OUR REFUGE.”PSALM 62:8

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, Building A-1 SUITE 1125, Alhambra, CA 91803 OR at 20274 Carrey Road, Walnut, CA 91789.