CLIENT is a young senior. At 65, in my book, she’s a young senior. She has been living by herself since she divorced 20 years ago. Her adult children have their

own lives and

LA lifestyle.

Fortunately for client, her condo is fully paid off. It’s now worth close to $600K. The problem is that she operates two retail outlets in the food industry. Both outlets were doing great before the pandemic. 4 years of pandemic killed one of the outlets. The other outlet is still surviving and provides a source of regular income for client. In addition, she enjoys doing that business so she wants to continue doing that business.

The outlet that died as it could no longer pay the rent of $10K a month owes $180K of rent. So obviously, the landlord wants to get paid. Client did not borrow from the SBA for the PPP loans to keep this outlet going, unlike many business owners who did resort to that alternative which did help to survive the pandemic, but it’s a fact that businesses have not yet been able to get back to income at levels before the pandemic so there’s that dilemma, that many businesses have to contend with. Client only owes unpaid rent of $180K and unsecured debt of $20K. Landlord now wants to sue client for $180K.

Her initial desire is to file for Chapter 7 for a fresh start with no debt. Although theoretically her condo is totally exempt under current exemption of $630K, there is a significant risk that she could lose her condo to the Chapter 7 trustee. You never know, the trustee might have an interested buyer willing to pay $700K for her condo. Home prices are supposed to have dropped a little bit, but why even assume the risk of losing her condo with Chapter 7?

In Chapter 13, we can submit a plan that say, pays only $300 a month for 60 months, or a total of $18K without interest. This is only 9% of her total debt of $200K. Is she makes all plan payments timely, the court will discharge or wipe out $182K. And more importantly, in Chapter 13, there is zero risk of losing her condo to the trustee. Chapter 13 trustees do not have the power, unlike Chapter 7 trustees, to sell debtor houses. Being a businesswoman for 40 years, client immediately sees the wisdom of using Chapter 13 in her situation. If you have too much debt and need relief, please set an appointment to see me. I will analyze your case personally.

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Disclaimer: None of the foregoing is considered legal advice for anyone. There is absolutely no attorney client relationship established by reading this article.

From left: Wade Lai, Pechanga CMO Bill Anderson, LPGA stars Jennifer Chang, Mi Hyang Lee, Karen Chung, Amelia Garvey, Greta Vokeler, LPGA Ambassador Garbiella Then, Pechanga Development Corporation 2nd Vice President John Palinkas, and Pechanga GM Tjeerd Brink.