This is the case of Melika Murray who comes to me from North Chicago which is Lake County, Illinois for a bankruptcy consultation. Ms. Murray has never filed for bankruptcy before, even though she states that she has been struggling for debt for over 20 years. She owns no real estate. She is renting and she is paying approximately $525 per month on a month to month lease. She does not have a vehicle in her name and she uses public transportation. She has very little in the way of personal property. Basically her clothing and some minor household goods with approximately $1000. She does not have a 401(k), she has no life insurance. She cannot sue anybody. She does not receive any special assistance and she does not have any domestic pets.
She is divorced and she does have two minor children, a son and a daughter that live with her, Andre and Crystal. Unfortunately, she is not working. She is not gainfully employed. She is disabled, receiving SSI at the rate of $639 per month. So she has very little in the way of income. In terms of debt, her rent is $525, she has a telephone, she has a cell phone, and she has to pay for food and for her laundry so she is spending approximately $900 per month. Thus, she is going into the negative each month and financing that type of debt on credit cards. In the last three years, she has made approximately $8000-$10,000 per year based on SSI and other assistance. She has not been sued; she has not closed a bank account in the last year. She has been at her same address for more than two years. She has not owned a business in the last four years. She has not made any large payment over $1000 to a single creditor in the last three months. There are no co-debtors; it’s just her on these debts. She does not owe any student loans and she does not owe any tax debt.
What basically has her down is the use of credit cards over the last 20 years that have now totaled over $18,000 which she cannot repay. Her credit limits are reaching the maximum and she is worried about how she’s going to be able to sustain this kind of lifestyle going forward once she runs out of credit.
In this particular case, I would certainly recommend a Chapter 7 fresh start. This is a perfect scenario where someone who does not have the ability to repay and who has not committed any kind of fraud and is an honest person needs to avail herself of the Chapter 7 under the federal bankruptcy law to get a fresh start. The fresh start will not solve her problem going forward in terms of survival but it will eliminate the debt from the past to give her an opportunity to maybe restructure her budget or get other sources of income aside from the SSI. So if she can do that, she will get a fresh start, wipe out the credit card debt and be able to live on a week to week basis without carrying any debt.
Unfortunately, this is not the kind of case where once we eliminate the debt everything is going to be wonderful, because this person simply does not have very much coming in per month. But of course, if we can lower the amount going out by lowering the credit card payments which won’t be there once we file a Chapter 7, hopefully Ms. Murray can get back on her feet and support her family. So Chapter 7 is my decision for Melika Murray in this case.
