楊清泉律師專欄：YOUNG SENIORS FILE CHP 13 FOR $145K UNSECURED DEBT

YOUNG SENIORS FILE CHP 13 FOR $145K UNSECURED DEBT;  ANOTHER YOUNG SENIOR FILES CHP 7 FOR $10K CREDIT CARDS

Clients are 59 and 58. Husband had a solid and well paying job for the last 20 years. He grossed about $150K a year working for the State. But the job caused his mental health to deteriorate, as it was a high stress work environment where he saw the “evil that men do”. Since he could no longer take the mental stress, he resigned. I asked him what was so stressful about his job. He said that he would see dead people every day and how they died. He would see people with their heads cut off as an example and that image would stay with him in his mind for some time, which prevents him from sleeping. Well, if that’s the case, I can’t really fault him for losing $150K a year of income. Nobody wants to go insane from work or any source. The oldest woman in the world, the Italian woman who just turned 117 this week, when asked what was the secret to her long life, replied that she ate 3 eggs a day and divorced her husband in 1938. She said that leaving her husband was the best decision she made for her happiness. So, whatever the source of the stress, I guess you should remove that source of stress from your life if you want to keep your sanity and live longer; makes sense. So avoid people who are nasty and mean to you, and you should feel better because the source of harassment disappears, right? So client must be on the right track. 

What does he do now for work? He drives for Uber. There’s no stress. He makes decent money but nowhere near $150K, but he has peace of mind and he keeps his sanity. Wife makes $3,500 a month. Their household income has been reduced by 50% but they are happy with their decision to give up the higher income. The problem now is that they owe $145K of unsecured debt of which $100K is credit cards and $45K is student loans. The cards need minimum monthly payments of $3K a month. They don’t have the income to make that payment anymore. They actually want a Chapter 7 discharge of all credit card debt of $100K. Is this possible? Let’s see. They have an older house built in 1920 that has equity of $140K. This fact alone knocks them out of Chapter 7. In Chapter 7, they will lose the house and get $100K of cash as their exempt homestead equity. I don’t think they want to lose their house for credit card debt. They confirm to me that they want to keep their house. They also have a car loan in which they pay $250 for a small new car. Chapter 13 will reduce the car payment to $85 a month. They have a car lease for a luxury car, a Lexus, which they lease at $585. The lease ends in 2018. At the end of the lease, they have the option of converting to purchase at the same payment. Chapter 13 will allow them to assume the lease and do the conversion in 2018. 

Considering all relevant factors, debtors plan payment will be $680 a month for 60 months. It pays 16% or $16,000 of the $100,000 credit cards; pay the new small car in full at $85 a month. Clients will pay the Lexus lease payments directly to Toyota at $585. Student loans of $45K will also get paid 16% during the term of the plan. The $100K credit cards will be discharged after $16K is paid through the plan. However, 84% of the student loans are not dischargeable. They will own the new small car after the end of the plan and they will keep the Lexus lease. Their residence will not be affected. They keep it. They have no arrears on the house. They just continue their mortgage payments. The bankruptcy court protects their house from judgment liens from credit cards as well as wage garnishments on wife’s salary. The pending lawsuits for two credit cards will get dismissed. Order and peace of mind out of chaos will be achieved with Chapter 13. Client gets to keep his sanity. He doesn’t want to enter sanitarium. I am very glad to help him keep his sanity.

Next client is 61. She is single. Never got married. Her problem is she just got sued for $2,500 for a credit card debt. Her total debt is only $10K. However, her income is only $600 a month. She has a part time job doing inventory work. She counts inventory for an accounting firm. She rents a room for $250. Well, even though she only owes $10K, she obviously can’t pay $10K of credit card debt because the minimum monthly is $300, which is half her income. I guess she lives a really simple life; nevertheless, she needs debt relief. Chapter 7 will wipe out the lawsuit and the $10K of credit cards giving her a fresh start at 61. She tells me that her creditors call her everyday starting at in the morning up to nighttime and she can’t stand the stress of the phone calls. Here comes the stress factor again. It makes sense to get peace of mind to wipe out all her cards to remove the stress factor in her life doesn’t it? People just want to live their lives in peace and stress free. Chapter 7 will give her what she seeks.

“WE WAIT IN HOPE FOR THE LORD; HE IS OUR HELP AND OUR SHIELD.” Psalm 33:20

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 1000 S. Fremont Ave., MAILSTOP 58 BUILDING A-1 SUITE 1125, Alhambra, CA OR at 20274 Carrey Road, Walnut, CA 91789.