THE CHAPTER 7 BANKRUPTCY ‘FRESH START”

You surely must have heard of the Chapter 7 Bankruptcy “Fresh Start” but probably you are confused about this idea because it sounds like a square circle. How can a bankruptcy be a “Fresh Start” in your life? Isn’t bankruptcy an end all nuclear bomb that destroys everything? Very good question. The United States Supreme court defines the bankruptcy fresh start as giving the “honest but unfortunate debtor a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.”

This principle, often referred to as the “fresh start doctrine,” was solidified in the landmark 1934 case Local Loan Co. v. Hunt (292) U.S.  234).

What are the key elements of the bankruptcy “Fresh Start”? First, the bankruptcy discharge allows debtors to break free from unmanageable financial obligations and start over economically. Second, the discharge of debt eliminates personal liability for most eligible unsecured debts, permanently protecting debtors from creditor collection efforts, wage garnishment, and lawsuits. Third, it also ensures the debtor can retain certain exempt, necessary assets so they can function as a productive member of society.

How is the “Fresh Start” implemented? The mechanics are contained in Federal law also known as the Bankruptcy Code.

For individual debtors, the Bankruptcy Code has two kinds of bankruptcies. One is called Chapter 7 and the other is called Chapter 13. Chapter 7 does not require any amount of repayment of debt. It simply wipes out all dischargeable debts permanently. Chapter 13 is a reorganization that allows the debtor to restructure his or her finances and repay a portion of debts through a Chapter 13 plan, a repayment plan which can last between 3 to 5 years.

So, let’s give an actual example of a recent client. In this case, client owns a house in LA with equity of $500K. She has a retirement account, 401K of $120K. She owns a Lexus 350 h NX 2023 with a balance owed of $30K. She works as a registered nurse and has a gross income of $80K a year. She is a single mom with 2 kids, aged 6 and 10. Her parents live with her. She owes $100K of credit card debt on which she makes a minimum payment of $3500 a month. Her mortgage payment is $3500 a month including tax and insurance. Well, at this point, you can see there clearly is a big problem. Why? Because since her gross income is about $6.6K monthly and this is before deducting social security and taxes, which means her net take home is about $5K monthly, just the mortgage and the minimum credit card payments alone is already $7K. Client cannot make ends meet.

In this case, a Chapter 7 will give her a much needed “Fresh Start”. It will wipe out the $100K of credit card debt, thus freeing $3,500 of her monthly net income to cover monthly necessities, food, utilities, insurance, laundry, etc. and of course, the mortgage payment.

So, the question is, can she keep her house with $500K of equity? Yes. She keeps the house. Can she keep her $120K of 401K? Yes. She keeps her 401K. Can she keep her Lexus? Yes. She keeps her Lexus as long as she continues monthly payments.

Don’t forget Walt Disney filed for Chapter 7 bankruptcy before his Disneyland empire took off and became successful. And, Milton Hershey, of the Hershey chocolate company, also filed for Chapter 7 bankruptcy before his Hershey chocolate business became successful. I am sure you have gone to Disneyland and eaten a Hershey chocolate bar. Now you know both Mr. Disney and Mr. Hershey filed for Chapter 7 bankruptcy before their businesses became wildly successful because they both got a “Fresh Start” in life first by getting rid of all their debt.

And of course, our beloved President’s businesses have filed for Chapter 11 bankruptcy six times between 1991 and 2009. Even Orange County filed for bankruptcy reorganization a decade or so ago.

So, bankruptcy is good for you if you have preexisting debt that you are having a hard time paying off. If you think bankruptcy is bad for you, you better have your head examined because Walt Disney and Milton Hershey do not agree.

I will save Chapter 13 discussion for next article.

If you need debt relief, please contact my office and I will analyze your case personally.

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

PPRAYING ALWAYS HELPS

It also helps to pray to our God, His Beloved Son, Jesus Christ, and the Blessed Mother Mary for divine protection against financial problems, because we have a God who loves us and His Beloved Son, Jesus Christ, showers us with infinite mercy.  All we must do is humble ourselves and pray to the Sacred Heart of Jesus for a drop from His ocean of infinite mercy.  Jesus revealed in 1930’s to Saint Maria Faustina Kowalska of Poland that all sinners which we all are and those who do not believe in God and those who do not yet know Jesus, should all be brought to His Sacred Heart and be submerged in the ocean of His infinite mercy, for the sake of His Sorrowful Passion.  Anything you ask for, when you pray the chaplet for His divine mercy will be granted, if compatible with His will.  Moreover, you are guaranteed a peaceful death.

What is the current proof that God and Jesus are divine and all powerful?  I refer to Exhibit A, the incorruptible body of Carlo Acutis!

Exhibit A

CURRENT ONGOING PHYSICAL PROOF GOD IS ALMIGHTY

INCORRUPTIBLE BODY OF CARLO ACUTIS DIED 2007 AT AGE OF 15

Look at the incorruptible body of saint Carlo Acutis who died at 15 in 2007. You can look at his body in Rome, Italy, now 14 years after his death. He looks like he is just asleep in his jogging suit and rubber shoes!  That is a perfect example of an ongoing sign on earth that the God of Moses, our God, my God, is almighty and all-powerful that He even suspends the natural laws of biology and physics without any effort. He resurrected His one and only beloved son from death on the cross. Indeed, He has power over death.

I have thought, “What would the other religions believe if they saw the incorruptible body of the blessed Carlo Acutis? I think even Buddha, if he were alive today, would believe that Yahweh is the one True God.” No need to think about reincarnation and nirvana because his incorruptible body is available for all to see in Rome, Italy. We will not need any kind of explanation on the efficacy of modern-day mummification. Come on, man, which is all bull. The truth is in plain sight. Believe your own eyes that the one true God is all-powerful, and His name is Yahweh, “I am who Am.” He is the alpha and the omega, the beginning, and the end.

Exhibit B

MORE ONGOING PHYSCIAL PROOF GOD IS ALIMGIHTY

ADDITIONAL ONGOING PHYSICAL PROOF GOD IS ALIMIGHTY: INCORRUPTIBLE BODY OF ST. BERNADETTE IN NEVERS, FRANCE WHO DIED  146 YEARS AGO BUT HER BODY STILL REMAINS FRESH TO THIS DAY. I SAW HER INCORRUPTIBLE BODY 50 YEARS AGO. AND INCORRUPTIBLE BODY OF ST. CATHERINE LABOURE IN PARIS, FRANCE. WHO DIED 150 YEARS AGO AND HER BODY STILL REMAINS FRESH TO THIS DAY! I’VE BEEN TO PARIS 3X IN THE PAST 40 YEARS BUT HAVE NOT SEEN HER INCORRUPTIBLE BODY BECAUSE I ONLY FOUND OUT ABOUT HER INCORRUPTIBLE BODY LAST MONTH, JULY 2025. OUR BLESSED MOTHER MARY, MOTHER OF THE ONE TRUE GOD, TASKED HER WITH THE DESIGN AND DISCLOSURE OF THE MIRACULOUS MEDAL OF MARY TO THE WHOLE WORLD. MANY PHYSICAL AND SPIRITUAL HEALINGS SINCE THEN HAVE BEEN ATTRIBUTED TO THE MIRACULOUS MEDAL OF MARY WORN AROUND THE NECK.

“ETERNAL FATHER, WE OFFER YOU THE BODY, BLOOD, SOUL AND DIVINITY OF YOUR DEARLY BELOVED SON, JESUS CHRIST, OUR LORD AND SAVIOR, IN ATONEMENT FOR OUR SINS AND THOSE OF THE WHOLE WORLD, FOR THE SAKE OF HIS MOST SORROWFUL PASSION, PLEASE HAVE MERCY ON AMERICA AND THE WHOLE WORLD.”

Lawrence Bautista Yang is a graduate of Georgetown University Law Center and has been in Law practice for forty years. He specializes in Bankruptcy, Business and Civil Litigation and has handled more than five thousand successful Bankruptcy cases in California. He speaks Mandarin and Fujian and looks forward to discussing your case with you personally. Please call (626) 284-1142 for an appointment at 20274 Carrey Road, Walnut, CA 91789 or 1000 S Fremont Ave., Mailstop 58, Building A-10 South Suite 10042, Alhambra, CA 91803.