This is the bankruptcy case study for a Mr. Thomas who resides in Chicago, Illinois. Mr. Thomas has filed several chapter 13’s in the past and wants to see if he can get another shot at filing. He is not a homeowner, he is currently renting on a month-to-month lease, and he does not have a vehicle in his name. He has a checking account and a savings account with very little on hand, he has household goods valued at $6000, clothing valued at $3000, and has no other property at all. He is currently married with three dependent children. He is working for the past two months and his wife is working for the past three years. His prior cases failed due to the fact that he was unemployed for long stretches of time. At the current moment, he and his wife have approximately $2900 income per month.
We look at his monthly expenses, he has rent at $600 per month, electricity at $75 per month, cellular phone and $70 per month, food at $400 per month, laundry $25 for month, gasoline at $125 for month, religious charity at $250 per month, support to others at $80 per month, and tuition for the minor children at $400 per month. When analyzing his income and expenses he does have available money per month which can go towards a reorganization under chapter 13.
In terms of his statement of financial affairs, he brought in $7000 last year, $10,000 the year before, and $17,000 the year before that. He has had two residences in the last two years each for a stretch of one year. He owes the Department of Education for student loans approximately $2000. The biggest debt though and the reason for the filing is outstanding parking tickets owed to the city of Chicago. He owes approximately $14,000 in parking tickets and we can reduce that down to $1400 in a successful chapter 13. He also has credit card debt of $3000, payday loans at $1200, repossession deficiencies at $2000, medical bills at $3000, and child support arrears at $1200.
Chapter 13 Bankruptcy Is The Solution
Mr. Thomas is a perfect candidate at the moment for a chapter 13 bankruptcy. He can cut down the amount that he owes to the city of Chicago, protect his license, take care of his child support arrears, and pay the rest of his creditors less than in full. To do so, he must stay employed, state diligent in making all of his trustee payments over the course of a three to five-year period, and must heed the advice of his counsel. If he is able to do so, chapter 13 will be successful this time around.
