BANKRUPTCY has been in the headlines time and again. Chrysler filed for bankruptcy protection last week even as it’s partnership with Fiat was concluded. GM, the world’s largest company, will also be knocking at the door of bankruptcy court very soon. The CEO’s of both companies have very strongly argued against seeking bankruptcy relief saying that the public would not buy it’s cars if they sought bankruptcy protection as they held tin cups in hand begging for bail out funds to keep their businesses operating. Nevertheless, both companies have been or will be dragged into bankruptcy court with their feet kicking. The point of the story is that if you are in fact bankrupt, denial will only delay the inevitable trip to bank-ruptcy court. Both Chrysler and GM were hemorrhaging cash at the rate of billions of dollars a month. They are in fact bankrupt.
Bankruptcy reorganization will give them protection from law-suits, the ability to cut down and eliminate debt and contractual obligations in order for them to emerge eventually as lean and profitable companies once again. Without the ability to reorganize under the protection of bankruptcy court, they will collapse and die from the sheer weight of accumulated debt and contrac-tual obligations despite raking in billions of revenues.
How about you? Are you weighed down by too much debt? Is all your income being used to pay debt every month? Do you worry about being able to pay your debt everyday and every night? Are you thinking of selling property to pay debt, or to refinance your house to pay debt? If your answer to any of the preceding questions is "yes", are you currently in a state of denial, just like the CEO’s of Chrysler and GM? You might be denying the fact that you are actually bank-rupt and in need of bankruptcy relief. But if bankruptcy relief is good for Chrysler and GM, it might be good for you too.
Let’s take a look at your case. You own a house with a first trust deed balance of $400,000. You pay Countrywide $3,500 month-ly, excluding tax and insurance. You have heloc of $50,000. You pay Countrywide $500 monthly. You lease a MB 300 at $400 monthly. Your wife pays Toyota $500 a month for her Highland-er. You owe credit card debt of $50,000. You make minimum payments of $1,200 monthly. So far, the total for the forego-ing is $6,100. On the income side, you make net $3,000 as an LVN, and your wife makes a net of $5,000 as an RN. Your total household net income is $8,000. This is good income and puts your household on the top 20% of households in America. How-ever, we have not yet considered your monthly expenses for food, clothing, insurances and other necessities. Further, we have not considered the fact that you have a rental property with a first trust deed of $300,000 and a sec-ond trust deed of $100,000. This property is upside down and you pay another $3,500 monthly for the trust deeds. But the rent is only $2,000. Are you bankrupt despite your good income? You finance a deficit of $1,500 plus $500 for real estate tax, making a total deficit of $2,000. This deficit wipes out the entire difference between your net total income of $8,000 and $6,100, the total you pay for your house and cars. Yes, you are bankrupt. Even if you deny it, you are, in fact bankrupt.
Your trip to bankruptcy court in a chapter 7 case will allow you to keep most if not all of your as-sets including your house, cars and retirement accounts while getting rid of all debts that you want to get rid of. You are not going to die with a bankruptcy. On the contrary, bankruptcy will give you a fresh start without ac-cumulated debt and make you productive again. If it works for Chrysler and GM, bankruptcy will also work for you.
If you need debt relief, contact my office. I will analyze your case personally.
***
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., Bldg. A-1 Suite 1125 Unit 58, Alhambra, CA 91803.
( Published on May 16, 2009 in Asian Journal Los Angles p. C4 )
| < Prev | Next > |
|---|
