Chapter 13 Bankruptcy Case Study

Facts

This is the bankruptcy case study for Mr. Williams who resides in Chicago, Illinois. He is seeking information regarding chapter 13 bankruptcy. He filed a chapter 13 bankruptcy nine years ago, however the case never went through to confirmation. He is not a homeowner as he is renting on a month-to-month lease in Chicago. He owns a 2001 Dodge Caravan which has no financial lien against it. The vehicle is worth approximately $3000. He also owns a 1994 Mercedes-Benz which has a repair lien in the amount of $1600 against it. He also owns a 1998 Cadillac Caterra with an approximate balance of $6000 owed. In terms of personal property, he has a checking account at Bank of America, death benefit only life insurance, personal property valued at less than $600 and normal apparel valued at $300.Bankruptcy Debt

Budget

In terms of his household situation, he is single and he is retired. He is bringing in $1450 per month from Social Security. His monthly expenses total less than what he is bringing in per month. Thus, he does have disposable income to fund a modest chapter 13 plan. In terms of monthly expenses, he pays $600 per month for rent, $50 per month for cellular phone, $200 per month for food, $10 per month for medical, $50 per month for transportation and $153 per month for his auto payment. In terms of his financial affairs, he has been on Social Security for the last three years.  He did have a vehicle repossessed in 2013 which was subsequently surrendered. He has not owned a business in the last four years, he has not lived anywhere other than his current address in the last three years, he does not have a safety deposit box and he is not holding any property which belongs to someone else.

 

Debts

He is the only one responsible for these debts.  He does not owe for any student loans, and he does owe the IRS a modest $1000 for back taxes. The situation here is that he owes $2000 to the city of Chicago for parking tickets, $800 for credit cards, $1600 and personal loans, and $1000 for past-due utilities. Chapter 13 would allow him to maintain his license in good standing while he remains in the repayment plan. He does have approximately $250 available per month from his budget from which to fund the chapter 13 plan. Provided he can do so and maintain the case going forward, he will reduce his liability to the city of Chicago, clear up his license, and update his utilities so that they are back in good standing.

Recommendation

Thus, my recommendation for Mr. Williams from Chicago, Illinois would be a modest, chapter 13 repayment plan at the rate of approximately $250 per month or less depending upon his budget.

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