This is the case of Brian and Lori Shearing who reside in Plainfield, Illinois, Will County, Illinois. They were in my office today to discuss the possibility of a Chapter 7 fresh start. Let’s go through the particulars of their case.
They had a prior Chapter 13 back almost 20 years ago. So they are eligible from the standpoint for either Chapter. They have a single-family home in Plainfield with an approximate value of $165,000. They owe $165,000 to their first mortgage company Green Tree and they have a second mortgage through Great Lakes Credit Union of approximately $60,000. They currently are in the process of doing a short sale so if they can eliminate that debt, they don’t have to worry about a deficiency.
In terms of vehicles, they have a 2005 Buick LeSabre which is paid in full worth approximately $1700. And they have a 2000 Chevy Trailblazer with a finance debt of $17,000 to Wells Fargo. The vehicle is worth approximately $14,000 so no equity in that vehicle. They have a checking account at PNC and Chase with no money in either account. They have $900 worth of household goods, $200 worth of clothing, and they have life insurance with a death benefit only for each party. Husband has a 401(k) with $800 in it and they have domestic pets, four of them, valued at approximately $400. The couple is currently separated and they have two minor children ages 16 and 14. The husband works at Target in Plainfield, Illinois. Wife works at Suburban Foot and Ankle in Plainfield, Illinois and she also has a part-time job at Target as well.
In terms of monthly income, husband is bringing in $2100 per month; wife is bringing in $2000 per month and a part-time job of $210 per month for a grand total of $4487 per month. When we look at their monthly expenses, we’ve got $1200 for separate rent, the mortgage they are currently not paying because they’re trying to do the short sale. $250 for electric and gas, $200 for cellular phone, $50 for cable television, $50 for Internet, $500 for food per month, $100 for clothing, $100 for laundry and dry cleaning, $150 for medical and dental expenses, $375 for transportation expenses. Health insurance is $368 per month, auto insurance is $286 per month, life insurance is $62 per month, the one auto payment is $385 per month and they have an IRS payment of $80 per month. If you look at their income and their expenses, there is no money available to pay creditors. It is pretty much balancing and that’s without making a mortgage payment.
In terms of financial affairs, husband over the last three years has made approximately $36,000. The wife has made approximately $35,000. They have not received any unemployment or Social Security in the last three years. They have not made any large payment of over $1000 to anyone creditor in the last 90 days. There are no lawsuits pending. Nothing has been repossessed or returned. They did close a TCF checking account back in June, no balance at the time that they closed it. They don’t have a safety deposit box. They haven’t been at any other address other than their current address and they have not owned a business. There are no co-debtors, there are no significant student loans and a little bit of IRS debt as I mentioned, and $80 payment per month for the next 10 months.
When I strongly recommend here is a Chapter 7 bankruptcy case and that’s whether or not they can short sale the property or not. Under Chapter 7 Bankruptcy, they will be able to eliminate the debt on the first and second mortgage even if they can’t conduct the short sale. In terms of the credit card debt, their medical debt in their outstanding personal loans, those are all easily eliminated in Chapter 7. We have a couple here that is currently separated and going through some trouble. Obviously they have to take on some additional expenses with maintaining two separate residences and Chapter 7 is definitely something that’s going to get them over the hurdle financially and maybe even, who knows, save their marriage. As you know, many financial problems have led to marital problems.
So for Brian and Lori Shearing of Plainfield, Illinois, Chapter 7 is my recommendation.
