This is the Chicago bankruptcy case study for Yvonne who resides in Chicago, Illinois. She is interested in finding out whether or not she qualifies for chapter 7 bankruptcy; and if so, what the process is to get started. She filed bankruptcy 25 years ago. She understands that there have been changes to the law since then and she wants to make sure that she can have a smooth process this time around.
In terms of real estate property, she is not a homeowner. She is currently renting on a yearly lease which expires in April. She has of 2009 Toyota Rav4 which is financed through Toyota Financial Services. The value the vehicle is approximately $17,000 and the total debt that she owes on the vehicle is approaching $17,000. Her monthly payment on the vehicle is $420 and she is up to date. She’s a little bit indecisive on whether or not she would like to keep paying for that vehicle or not. So as of right now will just consider that she will keep the vehicle. However, she has the right to change her mind during this process.
In terms of personal property, she has a checking account and a savings account with an approximate balance totaling $1600. She values her household items at $300, her clothing at $300, and she lists no other significant property whatsoever. She is single with no dependent children and she is currently unemployed. At the present time she is receiving zero income from unemployment and only $556 from government assistance.
Looking at her monthly expenses, she pays $800 for rent under section 8. Her electricity is $82 per month, telephone $50 per month, cellular phone $10 per month, food $30 per month, laundry $20 per month, medical $3 per month, gasoline $10 per month, health insurance $61 per month, auto insurance $73 per month, and life insurance and $20 per month. Her overall expenses are very low and she seems to be budgeting extremely well in some categories where people get carried away with such as food and entertainment. However, the lack of income is what is really hurting this person.
In terms of her summary of financial affairs, she really hasn’t worked in the last three years. She has been relying on government assistance at the rate of $556 per month. She is not currently in any lawsuits, she has not closed a bank account in the last year, she does not own a safety deposit box, she has not transferred any property out of her name, she has not owned a business in the last four years, and she has not made any large payments of over $1000 to any creditor within the last 90 days. She does not have any student loans and she does not have any tax debt.
The real issue that she is struggling with here is miscellaneous debt. There is debt related to credit cards totaling about $4000, medical debt in the range of $1500, personal loans of approximately $1500 and minor utility bills of approximately $1100. For a person who is gainfully employed and working full time, I would not recommend a chapter 7 bankruptcy. However, when you have someone who is unemployed and relying solely on government assistance for the past three years, then bankruptcy is a good choice to clean the slate. Thus, I would recommend a chapter 7 fresh start bankruptcy to eliminate the credit card, medical, personal loans and utility debt. Although this person cannot be collected upon should a judgment occur, it makes sense to stop the collection efforts, the harassment, and the stress related to the existence of unmanageable debt.
