Bankruptcy Case Study

This is the bankruptcy case study for James Stromberg who lives in the 6200 block of South Dorchester in Chicago, Illinois. James is here to talk about his financial situation and to see whether or not bankruptcy is going to be a solution for him. He did file a chapter 13 many years ago and that case was dismissed. He is currently renting and he does not own any real estate whatsoever. He has a 2002 Ford Explorer which is paid in full and has an approximate market value of $4500. In terms of personal property, he does not own a checking or savings account. He has a $600 security deposit on hand with his landlord and he values his household goods at approximately $400. He has no other property whatsoever. He does not have the ability to sue anybody and he does not expect to inherit any money in the next six months.

In terms of his life situation, he is single with a 19-year-old dependent son. He is not working as he is receiving Social Security in the amount of $1400 per month. In terms of monthly expenses, he pays $680 for rent, $100 for electricity, $60 for home phone, $60 for cable TV, $400 for food, $20 for clothing, $80 for gasoline, and $100 for auto insurance. Over the last three years he has earned Social Security income only. He had a truck that was repossessed in the last two years which is currently at the auto pound. He had a prior address in Bolingbrook, Will County Illinois. He does not have a student loan, he does not owe any income tax debt and is the only debtor on his accounts. The issue for James is that he owes $33,000 in medical bills, $4000 in parking tickets and approximately $500 in personal loans.

My recommendation to James is to file a chapter 13 bankruptcy so that he can undo the driver’s license suspension that he currently maintains. Instead of owing the city of Chicago $4000, he may be able to pay back as little as $400 on that particular debt. The same is true with his medical bills which total $33,000. He may be able to spend $3300 over the next 3 to 5 years to satisfy that debt. In terms of the monthly plan payment amount, I’m approximating that $140 per month over the next 60 months will complete his case. He will need a filing fee of $310 which gets paid directly to the Clerk of the United States Bankruptcy Court. Provided James can make those payments and budget accordingly, he will be able to get a huge savings on his debt and protect his driver’s license. Thus, I strongly recommend that James file a chapter 13 bankruptcy case to solve his debt problems.

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