Bankruptcy Case Study


This is the bankruptcy case study for Virginia L., who resides in Zion, Illinois. Virginia is seeking information with regard to debt relief. She is overwhelmed with debt which includes a past auto repossession, utility bills, bank overdraft charges, parking tickets, and other miscellaneous debt totaling approximately $13,000. Let’s examine the facts of her situation to see whether or not chapter 7 bankruptcy will be the best option for her.


She is not a homeowner. She is currently renting and her lease expires in November of next year. She does own a 2003 Honda Odyssey which is paid in full. The value of the vehicle is $1000. In terms of her other property, she has a checking account with a zero balance. The security deposit that she has with her landlord is $215, her household items she values at $200, her wearing apparel is valued at $200 and she has no other personal property whatsoever. She does however, expect a tax refund of anywhere from $4000-$5000 which is comprised primarily of earned income credit.

Household Expenses

In terms of her household, she is single with four dependent children with ages ranging from 10 to 16. She is currently working as a waitress and has been doing so for the past four years. She earns approximately $2000 per month from her job. Additionally, she receives $160 per month for child support and $660 per month for link. Thus, her total monthly income is approximately $2800. In terms of monthly expenses, her rent is $215, water and garbage is $80, electricity and gas is $250, cellular phone is $136, cable TV is $76, food is $700, clothing is $150, laundry and dry cleaning is $125, gasoline is $300, recreation is $150, auto insurance is $50, and other miscellaneous expenses per month amount to $20.\

Financial Summary

In terms of her statement of financial affairs, she has earned approximately $24,000 per year from her job for the past three years. She had a prior repossession of a Chevrolet Equinox back in 2011 which is one of the main causes of her debt today. She also had a checking account which was closed at Fifth Third Bank several years ago which has an outstanding balance of $2500. She has a student loan owed to the US Department of Education with an approximate balance of $6000.


When looking at Virginia’s complete financial situation, it appears that she would benefit greatly from a chapter 7 fresh start. Chapter 7 will eliminate the outstanding auto deficiency, the outstanding bank fees, as well as all of her other miscellaneous debt except for the student loan obligation. By filing a chapter 7, she will be able to manage her monthly expenses and provide for her four children with much greater ease than she can do so right now. Thus, my strong recommendation would be a chapter 7 fresh start bankruptcy for Virginia, from Zion, Illinois.

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