Chapter 7 Bankruptcy Fresh Start Recommendation

This is the case of Gail Sanders who lives on 60th St. in Chicago, Illinois.  She is interested in filing a Chapter 7 bankruptcy to eliminate credit card debt.  Gail has never filed bankruptcy before.  She is not a homeowner.  She is renting.  Her landlord is St. Edmunds Commons.  She has a yearly lease which expires in December.

In terms of a vehicle, she has a paid off 2004 Chevy vehicle with 113,000 miles.  We estimate the vehicle at approximately $1500 and she intends to keep it and keep it running.

She has a checking and a savings account at TCF and at PNC Bank.  The approximate balance in both accounts less than $100.  She’s got minor household goods which she is overvaluing at $5000 and minor clothing which she is overvaluing at $3000.  She has no 401(k), no retirement benefit.  She does not expect a tax refund.  She does not receive any kind of support.  She has no animals, no lawsuits pending, basically not much in terms of personal property.

She is a single person and she has three dependent children living in the property; an 11-year-old, a four-year-old and a one-year-old.  She works for the last two months as a medical assistant for Lurie Children’s Hospital of Chicago.  She is making approximately annually $31,000.

When we break it down, she’s got approximately $2500 coming in net from her job after tax.  She is not receiving any kind of child support or other government assistance.  When we look at her monthly expenses, it seems to be kind of a wash; she paid $835 in rent, $200 in electric and gas, $200 for cable and television, $400 for food, $200 for clothing, what had $50 for laundry and dry cleaning and she’s got $200 for child care.

In terms of her Statement of Financial Affairs, in the past two years she had made approximately $33,000.  This year she is on pace to make $31,000.  She was involved in the lawsuit, she got a Pay Day loan from PLS Loan Store but it was paid off in February.  She had a prior address on S. Michigan Ave. in Chicago.  She lived there for approximately 8 years until she currently moved.  She does not own a business.  She cannot sue anybody.  She has not transferred any property.  There are no co-debtors; it’s just her on those debts.  She has a student loan with the US Department of Education in the amount of $7000 which will remain due and owing after a bankruptcy.  She has no tax debt.  Her debt is basically credit cards.  Target, Children’s Place and a couple other miscellaneous credit cards totaling $10,000.  She still has $3000-$4000 worth of Pay Day loans outstanding and she has a cell phone bill, minor bills of approximately $500.  So we are looking at approximately $15,000 worth of unsecured debt that could definitely be eliminated in Chapter 7 bankruptcy.

Now, Gail was referred to us by Ann Camens who we also helped out from a financial crisis.  So Gail, I would recommend a Chapter 7.  Get a fresh start, keep the property, support your family, and get on with your life.

 

 

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