This is the case of José Manuel Verones who comes to me with Wauconda, Illinois seeking debt relief. Mr. Verones is not a homeowner and he currently lives with his parents so he doesn’t have a formal lease. He’s got a 2000 Chevy Malibu which is worth $2000 and it is paid for.
He has a checking account worth $500. No savings account. No household goods, very little in the way of clothing. He does have $5000 in a 401(k) and he gets a tax refund each year of approximately $600. He is single with no dependent children. He has been working for the last three months as an inside salesperson, earning approximately $24,000 per year. At the end of the month from his paycheck, he nets $1655 per month.
Let’s talk about his monthly expenses. He is contributing $350 per month to his family, $150 per month for electric and gas and $120 a month for his phone. He has outside food of $200 per month, $50 for clothing, $30 for laundry and dry cleaning, $25 for medical out-of-pocket, $450 for gas, told and transportation and $130 per month for auto maintenance. He has approximately $1200 per month in expenses. So without adjusting the numbers at all, he looks like he can possibly find a Chapter 13 plan for maybe two or $300 per month if he chooses to do so. In the past three years, he has earned anywhere from $24,000-$25,000 per year. He did close a checking account back in August. He did have interest in a business that has no value. It was started four months ago but it doesn’t seem to have any assets at all. There are no co-debtors, no student loans and no income tax debt.
In terms of credit card debt, he is $60,000 worth of debt. So this is where he might have the ability to repay, through a Chapter 13 trustee, a 10% plan which would be paying $6000 over the next 3 to 5 years as opposed to repaying the full $60,000 or opposed to eliminating all the debt outright. So Chapter 13, 10% plan, is what I’m recommending for José Manuel Verones has who comes to me once again from Wauconda, Illinois.
