DEBTOR WITH $500K HOME EQUITY SEEKS CHP 7 RELIEF FOR $420K LEASE LIABILITY

時間:05/08/2021 瀏覽: 1970

We’re seeing some unusual situations created by the ending of the pandemic, and high demand for housing caused by very low mortgage interest. With 100M or about a third of Americans already vaccinated, the end of the pandemic appears to be just around the corner. Pres. Biden believes that we can probably celebrate July 4th almost normally with family and friends over for BBQ without masks if everyone attending has been vaccinated. The variants don’t seem to pose a major problem as the vaccines are effective against them although at a lower efficacy rate, but certainly a booster shot should provide higher efficacy against the variants.

There’s the UK variant, the South African variant, the California variant, and the Brazilian variant. But there are no hate crimes against Anglos, Afrikaners and Blacks, Brazilians and Californians even though these variants exist. Why not, after all anti Asian hate crimes arose from the deliberate Trumpian-BS of the Chinese virus, the Kung Flu? Should not Californians bludgeon each other now that there’s a California variant? Or, the animus of hate should be directed against Anglos for the UK variant, should it not? Well, there you are the absurdity of Asian hatred equating the virus with a particular race. If you are from California, you should jump off a cliff en masse, with the rest of CA residents, following the example of mindless lemmings, to kill yourselves, to kill ourselves because of the CA variant.

What are lemmings anyway if you don’t follow what I’m saying here? Lemmings are small creatures, similar to guinea pigs& hamsters who jump off the sea cliff together, voluntarily, mass suicide, because they think they have overpopulated themselves so they can’t survive because there’s too many of them, so they kill themselves so that the survivors can have a better chance of a better life. It’s about preserving the lemming lifestyle of abundance for a set number of lemming population.

Yes there is such a creature as lemmings and they do commit mass suicide by jumping off a sea cliff so the rest of their population can survive. I didn’t make this up. If they were humans what they would do is not commit mass suicide, they would instead, create a reason to hate other lemmings of a different color or different color shade, to have a scapegoat, or to be precise, a scapelemming, to blame for whatever problem confronts them, and they would each have a hammer to hammer the scapelemmings to death. This is actually what happened in NY again, yesterday. A black woman used a hammer to assault two Asian women, actually hitting one of them on the head several times as they were walking a block away from hell’s kitchen where another Asian senior had been kicked on the stomach and kicked repeatedly on her head by a big black guy, all 300 lbs. of him just a month ago, not to mention the 6 Asian women killed in Atlanta also just a month ago by a white guy who said it wasn’t racial, it was sexual. Sure. Enough already. Hate crimes perpetrators will go to hell for eternity. What did Jesus say the 2nd greatest commandment is? Love your neighbor as yourself.

Client is 50. He bought a restaurant in November of 2019. What’s the worst time to buy a restaurant in the history of the human race? November of 2019 sounds about right. He signed a 5-year lease for the restaurant for $6K a month. That’s $72K a year. For 5 years, he’s on the hook for $350K of commercial lease payment for the restaurant. Being a new restaurant, the first 4 months was a constant struggle to pay the $5K a month lease. Daily sales were hovering between $500 to $1K a month, then sales increased to $2K a month in January 2020, but started slowing down again to $300 to $500 a month in February and March 2020. The rest as they say, is history. The pandemic lockdown started end of March 2020. Restaurants were the principal losers in the lockdown. You can’t open the restaurant. There are no sales whatsoever. You got PPP loans, which could be forgiven if they are used to pay payroll and rent. Client did apply for PPP but since there really was no track record except for 4 months being a new business that it was, he got a measly PPP loan of $10K, which he used to pay 2 months of rent.

He reopened the business this month and was able to pay half a month’s rent to the landlord who asks for unpaid rent of $60K for last year, and $20K for this year from January to April of 2021. He considers some kind of repayment plan but with the very slow sales right now of $300 daily, he doesn’t know how much losses he has to bear with for the next 12 months, let alone just another 6 months. He decides to call it quits and finally throw in the towel, as he just doesn’t want to think about the restaurant anymore. It just gives him a headache, migraines, almost every night. Can’t sleep. It’s just not worth it, he thinks, it will be the early death of him with so much worrying of how to make ends meet and repay $80K of unpaid rent. I can’t really blame him for feeling depressed.

On the bright side, his residence that he bought for $300K only 3 years ago is now worth $500K. I asked him how much mortgage balance he owed. He said nothing owed. The house is fully paid. With houses in short supply and mortgage interest at 2.3% for new house purchases, there is a strong demand for houses that push the prices sky-high. Of course, if you sell your house, you do get a big chunk of cash, but that’s not enough to buy another house here in LA. You’d have to move to AZ or TX for a good price on houses there. Good price meaning, house prices are still reasonable over there. Even NV has reasonable housing prices. A normal house in LA would cost on the average $800K, that’s not reasonable. I remember our first house in LA was only $130K. For that very same house today, we would have to pay $850K. As Bill Gates said, you’re not stupid for being born poor. But if you die poor, yes, you’re stupid.

Client is in luck today because the homestead exemption in CA today is now $600K of equity. This took effect on January 1 of this year. Even with his house at a current fair market value of $500K, all equity, he would still be able to wipe out the $350K of future unpaid restaurant and the unpaid back rent of $80K, or total wipe out of $420K of personal liability, with a Chapter 7 petition because of the new amended homestead exemption. Before January 2021, client would not be able to wipe out the $420K liability without losing his house to the BK trustee. Under the old law last year, the Chapter 7 trustee will sell his house at $500K, give him $100K as his homestead exemption, and use the rest to pay the $420K unpaid future and back rent!

In the midst of his misfortune, Chapter 7 that now allows him to keep his $500K fully paid house exempt completely under bankruptcy law proves to be his good fortune. I mean this was totally unbelievable and unheard of before the new homestead exemption of $600K took effect this year.

If you need debt relief, please set an appointment and I will analyze your case personally.

“DO NOT BE WISE IN YOUR OWN EYES; FEAR THE LORD AND SHUN EVEIL.” PROVERBS 3:7

Lawrence B. Yang is a graduate of Georgetown University with a Master’s Degree in Law and specializes in Bankruptcy, Business, Real Estate and Civil Litigation. He speaks English, Mandarin and Fujian and has successfully represented thousands of clients in California, including companies overseas. Please call Angie, Barbara or Jess at (626) 284-1142 for an appointment at 20274 Carrey Road, Walnut, CA 91789 or1000 S. Fremont Ave., Mailstop 58, Building A-10 South Suite 10042, Alhambra, CA 91803.