This is the bankruptcy case study for TJ who is seeking protection under chapter 7 of the federal bankruptcy code. Let’s look at the particular facts of his case. He is currently married and he is a homeowner. He owns a condominium with a market value of $70,000 and an outstanding debt of $50,000. He is up to date on his payments, and he wishes to keep the property after the bankruptcy is completed. He has a 2004 Toyota Corolla which has 100,000 miles on it and it is paid in full. He estimates that the market value of the vehicle is $5000. In terms of personal property, he has a checking account at PNC which is currently frozen by a court order. There is $3000 sitting in that account awaiting a court order. In terms of household goods, he has $2000, personal property worth $300, jewelry worth $10,000, term life insurance and a retirement account valued at $20,000.
He is currently married but in the process of getting a divorce. He has one minor child, age four, who resides with him. He is currently working at a company in Wheeling, Illinois, earning approximately $17,000 per year. He is paid every other week and he brings home approximately $2600 per month. Looking at his monthly expenses, his mortgage is $540 per month, property tax $200 per month, homeowners insurance $30 per month, Association fees $305 per month, electricity $30 per month, home phone $20 per month, cellular phone $50 per month, cable TV $30 per month, Internet $20 for month, food $300 per month, clothing $100 per month, laundry $20 per month, medical $50 for month, transportation $150 per month, health insurance $300 per month, auto insurance $150 per month, and day care at $1100 per month. His expenses exceed his income so he does not have the ability to reorganize under chapter 13.
I recommend Chapter 7 Bankruptcy
In terms of his debts, he is saddled with a $70,000 attorney fee as well as $2000 of credit card debt. The real issue is that he is currently in the process of a divorce and is incurring attorney’s fees that he cannot afford. The jewelry which would be an asset in his case is currently being held by his estranged wife. Thus, he does not have any significant assets in his possession. I would recommend a chapter 7 fresh start although he must understand that any ongoing attorney’s fees after the date of filing are going to be non-dischargeable. We can only eliminate the debt up until the time we file his bankruptcy case. After that point, if his divorce case lingers on, any additional fees are going to be due and owing. That is my recommendation for this fine gentleman from Des Plaines, Illinois.
