THE first senior is 73. He has been separated from his wife for 30 years but not divorced. So, for all intents and purposes, he is single because even if his wife makes a ton of money, her income is irrelevant under the means test since the client does not benefit from that income. 

Even if his estranged wife makes $1 million a year as Manafort’s financial advisor, that income is not part of the client’s household income under the means test. He says he has no idea where his wife is and has not seen her for 30 years. He comes to see me with a woman who sits behind him in my office. She smiles a lot. I presume that she must be his girlfriend. 

What is his problem now? His social security benefits have been cut by more than half! Unbelievable is the word. Now that he needs social security to survive, they cut it by 50 percent. I don’t even want to mention figures because the reduced amount that he now receives is not even enough to pay for his room rent of $500. He used to get $1,000 a month of social security. He says he’s appealing the cutback. I hope he is successful in his appeal because this reduction is not only unbelievable, it’s cruel. It’s like cutting off the umbilical cord from the unborn child. Despite this misfortune, the client appears to be taking it in stride.

To be precise, his problem now is that he has no money to pay for his $20,000 in credit cards, which need $600 a month of minimum monthly payments to keep them current. Needless to say, he has no money left to pay for these cards. His reduced $500 social security is enough only to pay for his room rent. I think we can all sympathize with his financial problem in his golden years. Nobody wants to be in this situation, as one becomes a senior. As a senior, one must have enough to pay for a roof over one’s head and have money left to pay for food and other necessities. And hopefully, have some money left to indulge in what one enjoys doing. Maybe eating out or traveling come to mind as life’s little pleasures that seniors can enjoy. I also know that many seniors feel lonely so they join a seniors club that allows them to have social activities of meeting other seniors and doing activities together.

The client does have one thing going for him. He is in perfect health. No hypertension. No diabetes. Not overweight. He has no chronic illness of any kind, although some have argued that aging is a chronic illness.

He needs Chapter 7 to wipe out the $20,000 of credit card debt. I’m glad at least I can help him this way. Who needs $20,000 of credit card debt at 73? Time marches on very quickly. We will all become seniors one day. All we can be is be young at heart and in the mind. Just like a car that starts breaking down, as it gets older, our bodies will do the same, as we get older. Right? 

Chapter 13 for senior no. 2

Senior no. 2 is 79 years old and married to his wife of 55 years. They are happily married to each other. They have aged well together. Unlike Trump, who has aged by himself, while his wives get younger & younger.  Out with the old and in the new.  Maybe that makes him feel like he will live forever. In the client’s case, they own a home with about $300,000 of equity. The mortgage balance is about $400,000. The mortgage payment is $2,500. Their joint social security income is $2,700. They have no other income. They owe $60,000 of credit cards. Oops. 

Clearly, the math doesn’t add up. $60,000 of credit cards needs $1,800 of monthly minimum payments to keep them current. But SS income is $2,700 while the mortgage is $2,500. This is where the children have to come in and help out because eventually, children will inherit the $300,000 of house equity. So, it’s only fair that the children help out now.

The children can help out by contributing the amount necessary for clients to pay off the $60,000 over five years under Chapter 13 reorganization. They will have to contribute $1,000 a month to the Chapter 13 plan. At the end of the 5th year, the court will enter a discharge order and clients will owe zero on the $60,000 of credit cards. They will be free of all credit card debt at 82. And they will still have their home, which probably will have gone up by another $200,000. So, children stand to inherit $500,000, but they should help out now with $50,000 over five years. Even looking at it as an investment, they invest $50,000 and get ten times back in five years. And they are able to relieve their parents of unnecessary financial stress, which will make them live longer.

If you need debt relief, please set an appointment to see me. 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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