This is the case of Carla Salerno from Chicago, Illinois who is interested in filing for bankruptcy. Ms. Salerno does not own any real estate. She is currently renting from a landlord at the same address as her but on the second floor. It is a month-to-month lease. She does not own a vehicle. She is not paying for a vehicle. She is not using anybody’s vehicle.
She has a checking account at Citibank. She has no savings account. She has $560 on account with her landlord as a security deposit. She has minor household goods worth approximately $400 and normal clothing worth approximately $400. She has no IRA, 401(k), profit sharing or other retirement account. She does not expect to receive a tax refund and she can’t sue anybody for any reason.
She is single and she has a dependent child who is two years old, her son. She has been working the past two months as an office clerk earning approximately $15,000 per year. When you take in the monthly income of $1062 per month in pocket as well as food stamps of $360, she has a total of approximately $1400 per month in pocket.
Let’s look at her monthly expenses. The rent is $560 a month. Electric and gas is $40 per month. Cellular phone is $65 per month. Cable telephone is $60, food is $360, clothing is $10, transportation is $92, auto insurance is $40 and child care tuition is $80 per month; roughly totaling $1300 per month. So on its face, it looks like Ms. Salerno has approximately $100 available that can go towards her unsecured creditors.
But let’s see what kind of debt she has. There are no student loans, there is no tax debt. $9500 in parking and red light tickets, another $472 for traffic fines. These are non-dischargeable debts that would not be eliminated in the Chapter 7. So Ms. Salerno needs to find a way to do a Chapter 13 and pay off these parking tickets and red light violations and save her license. I think she can do that but she is going to need a little bit of assistance because she only has approximately $100 per month which is not going to pay all of her debt over a 60 month period. So Chapter 13 would be my recommendation if Ms. Salerno can get some additional help or additional income from a job.
