【破产法】 YOUNG CLIENT CHOOSES CHP 7 AS BUSINESS DIES WITH $80K CREDIT CARDS OWED | 楊清泉律師事務所
10/09/2020 楊清泉律師事務所DIM SUM MIGHT BE GOOD FOR LONGEVITY
Client is young in his fifties. Believe me, that’s young. This is not only mentally young, but physically, fifties is still quite young. It is said that sixties now is the new forties. During the olden days, people were not expected to live beyond their forties. Even here in the USA, the average life expectancy in the year 1900 for women was 48, while for men it was 43. So at that time, if you lived to 50, that was already considered very good for you. But truth is told, at 43, we’re just getting a little wiser from life experiences. We’re not yet ready to die. We would still want to go on living to a ripe old age. Life expectancy statistics have improved since 1900 fortunately. In 2019, the average life expectancy for a white male in the USA was 78.6 years. But for black males, the average life expectancy in the USA is only 73. Hispanics are doing much better at 81. Why the disparity here? Here’s the interesting fact. Males in Hong Kong have an average life expectancy of 83. So, why the disparity again? I guess eating dim sum contributes to longevity, right? Let’s not get into any kind of emotional arguments. We all live by the grace of God Almighty. I mean Kobe was only 40 last year. Steve Jobs was only 56.
PRE-CO-VID GROSS RECEIPTS WERE $800K
Client owns and operates a business that used to generate $800K of revenues yearly with good profit for the last ten years. But even before the virus hit, his business was really slowing down. Last year, his gross receipts were down by 30%. With the lockdown and general business slowdown, he just doesn’t see any light beyond the tunnel anymore. He obtained a $50K PPP loan but that has been used up. There’s just no money left to pay all monthly expenses that keep piling up. He still has $70K of inventory that nobody wants even if he were to give away for free. You need storage space to house $70K of inventory; they take up a lot of space.
$80K CREDIT CARDS AND $50K PPP
Client used his credit cards to finance the business. He owes $80K of credit cards. And he just got the $50K PPP loan or grant. You know how the PPP works. If the $50K was used to maintain and pay salaries of employees at pre Co-vid levels the used for business expenses, then it may become a grant that does not have to be paid back. But client has decided to throw in the towel. He notes that even Walt Disney threw in the towel twice with two Chapter 7 cases before success came in a big way. Mr. Hershey of Hershey chocolates also started fresh with no accumulated debt with Chapter 7 once before his chocolate business became the world’s largest chocolate business. Of course Disney has suffered a major slowdown because of Co-vid, but once the vaccine is found and distributed, Disney’s business will bounce right back like a coiled spring no doubt. Didn’t the president just announce that the vaccine just cured him and that he was going to make sure that every American gets it for free? Well, that is certainly great news! We already got the vaccine and the president will make sure we get it for free! Hooray, Hooray, Hooray! But that’s what he said yesterday. It’s already today. What’s the story today?
FRESH START IN LIFE WITHOUT ACCUMULATED DEBT & FAST CREDIT BUILD UP
So client has decided to get his fresh start in life without accumulated debt just like Walt Disney and Milton Hershey. His credit score will increase very fast. Next year, his credit score may already be over 600 depending on how well he handles new debt. I suggest getting one or two of the preapproved cards that debtors get soon after they get their discharge. There are banks that specialize in sending debtor who just got out of Chapter 7 with new credit cards. Just get those but pay the whole balance every month so credit score goes up much faster. Client will be able to get new car loans immediately upon discharge but interest will be higher. Life is great with the fresh start! Just imagine client used to pay a minimum of $2500 a month to keep $80K of credit cards current. That’s $30K in 12 months, and $60K in 24 months, but the principal remains at $80K despite $60K of minimum payments in 24 months!
DISCLAIMER: NONE OF THE FOREGOING IS CONSIDERED LEGAL ADVICE. EACH CASE IS DIFFERENT.
“YOU ARE MY SHEPHERD. I WANT FOR NOTHING… THOUGH I WALK THROUGH THE VALLEY OF THE SHADOW OF DEATH, I WILL FEAR NO EVIL: FOR THOU ARE WITH ME… “ Psalm 23 written by King David 1000 BC.
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.
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