Asian Journal- The Filipino-American Community Newspaper

I thought after 30 years of dealing with creditors, I had heard everything in the book. But yesterday, client told me something I had never heard before. She had spoken to her mortgage lender to ask for a modification of her payment. The creditor which had become bankrupt itself but was purchased by a large bank, a beneficiary of the bailout, sent her a modification package. Standard in these packages is the income /expense sheet where the homeowner is asked to list household income on one side and expenses on the other side. Since client and her husband were both professionals, they made over a hundred thousand yearly. But even with the high income, client was having a hard time making the mortgage payments, which was about $3,000 for two mortgages.

Actually, I found it surprising that she was having difficulty paying the mortgages because she had enough net income to make the house payments. As I went through the expense items one by one, I found that her expenses were quite reasonable. When I asked her how much she paid for food and groceries, she said that their food cost was $1,500 monthly for a family of 5, at $300 per head, or $30 per day per head. I thought that was reasonable because a quick calculation in my mind concludedthat her expenses for a family of 5 were still within the parameters of the means test. However, she grimaced a bit when she told me that her food cost was $1,500. So, I asked her why she grimaced. She said their first trust deed creditor, in analyzing their loan modification request, had told her that $1,500 was too much for food because the bank allocated only $925 as a reasonable expense for food for a family of five. I thought this was really strange because in my many years of bankruptcy law practice, I had never heard a creditor, trustee or even a judge, tell a debtor that she was spending too much money on food. But times certainly are changing.

I thought that creditor was totally out of line in telling client that she spent too much on food. But that’s what happens when you’re at the mercy of the creditor. They talk to you, any which way they want. They tell you how to live your life. Indeed, they even tell you how much food you can buy to feed yourself and your family! Not to worry. All is not lost because our President-elect has just shown that the money problems of ordinary Americans like us, is nothing to worry about. I heard on the radio that he has just chartered the biggest plane available, a 767, from United to fly himself and his family from Chicago to Hawaii, to a rented $9 million villa along the coast of Hawaii. Last I checked, these villas are renting at $10,000 a day. This is called leading by example. A 767 can fly several hundred people from here to Asia or Europe without refueling. If our president elect can spend extravagantly for a Christmas vacation for himself and his family in this economy, I don’t see why creditor should be allowed to tell client that spending $1,500 a month to feed her family of 5 is too much. When even Toyota expects a loss of $1.8 billion this year, with sales in America and Europe down more than a third from last year, and your creditor tells you that you are spending too much on food to feed your family, the world has turned upside down.

If you don’t ever want to have your creditor tell you that you spend too much money on food to feed your family but you have too much debt, I would seriously suggest to you that you consider filing a Chapter 7 petition to get rid of your accumulated debt. The point of getting rid of your debt is to allow you to control your own destiny again and for you to become the king of your castle again.

If you need debt relief, contact my office. 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., Bldg. A-1 Suite 1125 Unit 58, Alhambra, CA 91803.