楊清泉律師專欄：MOM WITH TWO TEENAGERS WANTS CHAPTER 7 DISCHARGE OF $20K CREDIT CARDS
楊清泉律師事務所
MOM WITH TWO TEENAGERS WANTS CHAPTER 7 DISCHARGE OF $20K CREDIT CARDS;SENIOR REVISITS CHAPTER 7 AFTER 20 YEARS; DISABLED CLIENT SEEKS TO DISCHARGE FEDERAL STUDENT LOANS OF $70K WITHOUT BK
CLIENT NO. 1
Young mother of two teenagers, both daughters, presents her problem as follows. She is a registered nurse with gross income of $70K. She doesn’t own a house but pays rent of $2K for herself and daughters. Husband is still abroad in their country of origin, waiting to be petitioned to migrate when client’s finances have stabilized. She is paying for a new Acura SUV at $600 a month. Her net income is $5K. The problem it seems is that she has $20K of credit card debt, which she has been paying for two years after they migrated to California ten years ago. She pays about $750 a month for minimum card payments. She has paid this amount for the last 8 years. She is unaware how much total she has paid to keep $20K of credit currents for the last 8 years. I said just multiply your minimum monthly payment of $750 by 12 months, then multiply the sum by 8 years, and that results in $72K. I said you have paid $72K to keep $20K of credit cards current in the last 8 years. Doesn’t seem fair but it’s true. That really is the simple truth about credit card debt. If she did not have credit card debt in the last 8 years, she would have $72K of cash in the bank right now, assuming she saved all of that money.
Now the problem is that she wants to petition her husband to migrate. So, I asked what’s the problem you can do that right now? She said she has to pay lawyer and immigration fees to bring him in, and she doesn’t have money to do that if she keeps on paying for her credit cards. Her credit score is about 600. I told her that when she files her Chapter 7 case, her credit score will be 500, but in 2 years, if she handles new credit on a timely basis, her credit score will be at least 600, or over it. All she needs to do is pay the Acura on time, and her credit score will be over 650 on the third year. On the 7th year, her credit score may well be over 730, and on the 10th year, there is no record of bankruptcy filing on the credit report. Between getting her husband to California and paying credit card debt, I guess you know what she opted for. It’s not easy taking care of two teenagers on your own, any parent can tell you that.
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CLIENT NO. 1
Young mother of two teenagers, both daughters, presents her problem as follows. She is a registered nurse with gross income of $70K. She doesn’t own a house but pays rent of $2K for herself and daughters. Husband is still abroad in their country of origin, waiting to be petitioned to migrate when client’s finances have stabilized. She is paying for a new Acura SUV at $600 a month. Her net income is $5K. The problem it seems is that she has $20K of credit card debt, which she has been paying for two years after they migrated to California ten years ago. She pays about $750 a month for minimum card payments. She has paid this amount for the last 8 years. She is unaware how much total she has paid to keep $20K of credit currents for the last 8 years. I said just multiply your minimum monthly payment of $750 by 12 months, then multiply the sum by 8 years, and that results in $72K. I said you have paid $72K to keep $20K of credit cards current in the last 8 years. Doesn’t seem fair but it’s true. That really is the simple truth about credit card debt. If she did not have credit card debt in the last 8 years, she would have $72K of cash in the bank right now, assuming she saved all of that money.
Now the problem is that she wants to petition her husband to migrate. So, I asked what’s the problem you can do that right now? She said she has to pay lawyer and immigration fees to bring him in, and she doesn’t have money to do that if she keeps on paying for her credit cards. Her credit score is about 600. I told her that when she files her Chapter 7 case, her credit score will be 500, but in 2 years, if she handles new credit on a timely basis, her credit score will be at least 600, or over it. All she needs to do is pay the Acura on time, and her credit score will be over 650 on the third year. On the 7th year, her credit score may well be over 730, and on the 10th year, there is no record of bankruptcy filing on the credit report. Between getting her husband to California and paying credit card debt, I guess you know what she opted for. It’s not easy taking care of two teenagers on your own, any parent can tell you that.
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