Client seeks chapter 13 relief for mortgage default, credit cards Senior seeks chapter 7 for relief for 40K credit cards

“ If you are saddled with debt, now is the time to get them discharged.Better now than later.”
CLIENT is 48, married and has a good job paying him $100K gross a year. A family emergency has caused him some financial hardship because money meant to pay for the house and credit cards were used instead for medical expenses of his brother abroad. Brother is only 35 and single and lives abroad, waiting his turn to receive his visa to migrate here. Another 4 years to wait. Brother has a good job abroad working as representative in a call center. He makes about $700 a month. For a single person making $700 a month, and just waiting for his visa to come to the Promised Land, life can’t get much better. No responsibilities; enough money to spend; and good health. What else can a guy ask for? On weekends, he goes scuba diving about 40 miles off the capital. He says its very enjoyable because going under water with a lot of live corrals and fish to see is “like traveling to another planet”.
However, lately, brother noticed that his legs were getting “fatter.” The doctor says that his legs are starting to retain water because he has some kind of heart problem. Thoracic and cardiac surgery had to be performed immediately as otherwise his physical condition would rapidly deteriorate and he could very well die from cardiac arrest! Not cool. Brother had no medical insurance to pay for the surgery and medical expenses estimated at $20K. The family depends on client for financial help because at $100K gross a year, client does have the resources to help. And since he loves his younger brother, client sends the $20K by not paying his mortgage and using $10K of credit cards. So that’s done. The surgery is performed and brother has a new lease on life. Thanks be to our God Almighty, Yahweh, and His beloved son, Jesus Christ! Whoever goes to the Lord for safety, whoever remains under the protection of the Almighty, can say to Him, “You are my defender and protector. You are my God; in you I trust.” He will keep you safe from all hidden dangers and from all deadly diseases. This is what Moses said in Psalm 91 so it is true. Moses was as close as a man could get to our God.
After the family emergency, client is now behind 3 mortgage payments, is faced with $20K of credit cards. He also owes $5K to the IRS for 2016. He has sent this month’s mortgage payment to the bank. But that payment has been returned to him with a notice that the bank will be sending him a notice of default with intent to foreclose soon if he does not send the bank 4 payment or $12K.
The best relief for this kind of financial situation is Chapter 13. Why? First, Chapter 13 will stop the foreclosure process upon filing. So client does not have to worry about losing his house to foreclosure. Second, client will be given 5 years to pay the default of $12K without interest. Third, he will also be given 5 years to pay the $20K of credit cards and the $5K of back taxes. So, Chapter 13 gives client a breathing time of 5 years to handle his mortgage default, his credit cards, and his back taxes. During all this time, client is immune from all collection efforts of creditors, including foreclosure of house, lawsuits, garnishment, and liens.
Second client is 74. Pretty much a senior but doesn’t look a day over 60. She is now a widow. Her husband predeceased her 5 years ago. Her single daughter lives with her and they help each other. Her income is still ok. She receives social security and a work related pension that gives her a combined gross of $2400 monthly. She still works full time as a caregiver and is paid $1800 gross monthly. So, she has $4200 monthly. Not too bad. The problem is that she owes $40K of credit cards. She needs $1500 to make minimum monthly payments on these cards, which she has kept for the last 10 years. To make a long story short, she has paid $180K on $40K of credit cards for the last 10 years but still owes today the same $40K. This is why Visa is a good stock to own. It makes tons of your money! As a result, everything that she makes from the full time job goes to pay her credit cards.
Chapter 7 will wipe out all of the $40K credit cards so she can start saving her net take home pay from her caregiving job. It’s about time. At 74, she certainly needs to be able to save all of the money she makes. She really should have filed for Chapter 7 ten years ago. If she did, then she would have $180K in the bank saved up today, wouldn’t she?
If you are saddled with debt, now is the time to get them discharged. Better now than later when you are about to retire. But if you have not yet gotten rid of your debts yet and you are now a senior, believe me, you need to get rid of your debts now that your income is less than half of what it was when you were younger.
If you need bankruptcy relief, please call my office for an appointment and I will analyze your case personally.

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Lawrence Bautista Yang specializes in bankruptcy, business, real estate and civil litigation and has successfully represented more than five thousand clients in California.  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 91803.

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