Bankruptcy Filing Case Study From Aurora, Illinois.

Bankruptcy Facts

This is the bankruptcy case study for George from Aurora, Illinois. George is thinking about a chapter 7 bankruptcy filing since he previously filed a chapter 13 bankruptcy one year ago and that case was dismissed. George does not own any real estate and he is currently renting on a month-to-month lease. He has one very old vehicle which he claims is not running.  It’s a 1975 Oldsmobile Cutlass supreme with a value of about $500. He does not have a checking or savings account, he values his household items at $500, he values his clothing at $500, he expects a federal tax refund of approximately $700, and he has a current lawsuit pending against him in which he is listed as a defendant.

Family Size

In terms of his household, he is single with no dependent children. He is working as a dockworker and has been working in that capacity for approximately 8 months. He is paid once a week and he earns a total of $1520 per month. In terms of monthly expenses, he is paying $600 for rent, $70 per month for cellular phone, $400 per month for food, $100 for month for clothing, $200 for gas and transportation as he uses his mother’s car, $100 per month for recreation, and right now he needs to get auto insurance in that he is not fully covered. When we look at his income and his expenses, it appears that there are not available funds per month in which to fund a chapter 13 reorganization. This works in George’s favor since he came in wanting a chapter 7.

Finances

In terms of his financial affairs, he has earned anywhere from $10,000-$15,000 per year over the last three years. He has not received any unemployment or Social Security benefits in the last three years. He has not had any property repossessed or returned to a creditor within the last year. He has not closed a bank account or transferred any property or given away any valuable asset without full payment in return. He has had a prior address in Aurora, Illinois approximately 9 months ago. He has not sold or transferred any real estate and he has not owned a business in the last four years. He is the only one responsible for this debt as nobody co-signed with him. He does not owe for any student loans and he does not owe for any federal or state tax debt.

Debt Issue

The issue for George is that he had a foreclosed property six years ago. He also has credit card debt totaling $2000. The key for George is to get out from under that deficiency judgment that was entered in the foreclosure case. He tried previously to reorganize that debt in a chapter 13, but there were not sufficient funds to make the monthly payment on time consistently. He did have the option to convert the chapter 13 to a chapter 7 but for some reason his prior attorney was overcharging in order to do that conversion.

Solution

The good news for George is that he can be helped with a chapter 7 fresh start bankruptcy. This will eliminate the mortgage deficiency as well as the credit card debt. Since he is just getting by each month, he will be in a better position in that he has no debt.  However, he still needs to budget to improve his financial situation going forward. So my strong recommendation for George from Aurora, Illinois is a chapter 7 bankruptcy to eliminate his miscellaneous debt and to get a fresh start.

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