楊清泉律師專欄：YOUNG CLIENT SEEKS TO DISCHARGE $780,000 WAGE GARNISHMENT; GOOD SAMARITAN CLIENT SEEKS TO DISCHARGE $2O,OOO LAWSUIT; SENIOR SEEKS SOLUTION FOR WRONGFUL DEATH $1.0M LAWSUIT

CLIENT NO. 1

Client is 37. He is single and lives the lifestyle of a single person in Southern California. He makes $5K gross monthly being a gerontologist. Rents a studio for $1500 near the beach. On Friday nights, he’s out with friends. Yep, that’s what the single lifestyle is. He has a gym membership, which he uses 3 times a week. He works out to build muscles so he can be attractive to women, because women, as I understand, love muscles. They don’t like their guy fat, or skinny. They want hunks with small waists and good-looking butts. If they can get a guy who is built like Captain America but can sympathize with them emotionally, that’s the perfect man. But most guys are clumsy oafs and clueless to the female psyche. That’s the male-female paradox. Ricky Martin is one good-looking dude. But sorry, he prefers dudes.
I am truly surprised by the amount of wage garnishment. I asked him what he did to owe such a big amount. He explains that a relative used his name to buy a $1.5M house with zero down. You should never agree to this kind of arrangement. Take heed because the relative who used your name and credit has no actual risk or liability. You assume 100% of the risk and liability. What happened was, the house got foreclosed judicially. Only 10% of California foreclosures are judicial. 90% of foreclosures are extrajudicial where there is no lawsuit and no court judgment is involved. Extra-judicially involves only a notice of default that is recorded with the county recorder’s office, which gives the homeowner 90 days to cure the default. If the default is not cured, then the trustee sets the auction sale or foreclosure of the house not earlier than 21 days from the expiration of the 90 days. If only a first mortgage is involved (no second mortgage), the extrajudicial foreclosure results in no deficiency amount owed by the homeowner after the foreclosure even if the auction sale yields less than what is owed. On the other hand, in a judicial foreclosure, as in young client’s case, mortgagee creditor files a foreclosure lawsuit in superior court and asks the court to order the auction sale and if the auction sale proceeds is less than what is owed, the creditor further asks for the court for a deficiency judgment against the homeowner.

Therefore, client’s relative must have used client’s name and credit to buy a $1.5M house. Relative was unable to sell the house for over $1.5M or even near $1.5M, so relative could not and did not make any mortgage payments. Eventually, the bank decided to file a lawsuit in court to foreclose the property and asked the court for a deficiency judgment against client. Hence, the foreclosure sale yielded about $800K, leaving a judgment of $780K against client. That judgment is now being enforced against the wages of client who makes $5K a month. Client has already been garnished $1,250 a month for the last 3 months. I guess he just wised up when relative would not call him back when he left messages for relative to give him at least the $1,250 a month to make him whole. Not even an apology! I qualify him for a Chapter 7 discharge, for a fresh start. Wise decision. With the Chapter 7 filing, the wage garnishment will stop immediately and the judgment will be dissolved and the judgment will be discharged. A badly- needed fresh start for client, who really was just a victim of trusting relative to do the right thing. Got used and abused.

CLIENT NO. 2

Client is 50. Last year, a friend asked her to do a favor to guarantee the purchase of a truck. Friend was enthusiastic about being an owner operator of a big rig to haul cargo interstate. He estimated he could make net of $4K to $6K a month. After waking up at 5 a.m. every morning for the last 12 months and driving long haul everyday, he actually lost money every month. In addition, his now has an aching back and now goes to see a chiropractor every week for back pain relief. Friend decides to return the truck to creditor. Creditor sells the truck for $15K, and now files a lawsuit against client who is the guarantor for the voluntary return deficiency of $20K. This is a simple breach of contract. Creditor sells the truck at wholesale a gets a lot less than what is owed by contract. By contract, creditor is owed $35K for the truck. So after receiving net sales proceeds of $15K, friend still owes $20K. But since friends has absconded and can no longer be found, creditor sues client on her personal guaranty. 
Client is beside herself. She said she even tried to work out a payment plan on the $20K but creditor would not agree and just decided to sue her. She said she has a house with $100K of equity and she no longer works. She lost her job 3 months ago. She was so afraid that she was going to lose her house. On the contrary, I assured her, on a Chapter 7, the bankruptcy court will protect her house such that no lien can attach to it, and the discharge will wipe out the $20K lawsuit. So, chapter 7 really solves all her financial problems completely and even gives her a fresh start in life. Her credit score will be about 620 next year after filing for Chapter 7 this year as long as she handles her new credit well on a timely basis. This is a classic bankruptcy giving debtor a fresh start in life, unburdening her from oppressive debt.

CLIENT NO. 3

Client is 59. He made an illegal u turn in the middle of the road to get gas. When he executed the turn, a motorcyclist rammed into his car. Motorcyclist was in a coma for week, later died. Relatives now bring a wrongful death lawsuit for $1.0M against client. First of all, bankruptcy cannot discharge a wrongful death claim. It’s an exception to discharge. However, there is a solution that client can live with. I will discuss this when I feel like it maybe next week.

 “YOU WILL SHOW ME THE PATH OF LIFE;IN YOUR PRESENCE IS FULLNESS OF JOY; AT YOUR RIGHT HAND ARE PLEASURES FOREVERMORE.” PSALM 16:11.

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.