This is the case of Joseph Loomis who comes to me from Aurora, Illinois for consultation regarding debt relief. Mr. Loomis has never filed for bankruptcy before. He is not a homeowner and he is not renting, either. He is living with his parents. He has a 2012 Ford Transit which is financed by Ford Credit and there is no equity in that vehicle. There is also a co-debtor on that vehicle.
In terms of personal property, he has very minor household goods, a little bit of furniture, a little bit of clothing and he has approximately $35,000 in an IRA which is protected. He is single with no dependent children and he is currently not working. He is working sometimes part-time as a newspaper delivery time but that is spotty at best. So in terms of income, he has approximately $1700 per month which is 1099 income, so he has to pay his own tax on that. So after tax, he could be looking at about $1300-$1400 net per month.
He is kicking in $225 to his parents for rent as well as $200 per month for electricity and gas. He has $225 per month for phone, cable and Internet. He has a food expense of $250 per month, minor clothing expense at $50 per month. Gas, tolls and transportation is a big expense, that’s $500 per month. And he is very charitable; he gives $100 per month to church. So his income and expenses are basically a wash or he is losing a little bit of money per month.
In terms of income, he has made approximately $15,000 this year so far and in the last two years, he received unemployment income of approximately $15,000 per year. He did have a Chevy Tahoe which was repossessed back in 2007 by GMAC and they are pursuing him for a deficiency. He hasn’t owned a business in the last four years. He hasn’t transferred any real estate in the last four years and he does not have a safety deposit box. He is the only one to responsible for his debts. There are no co-debtors. He has no student loans and no income tax that.
Once again, the culprit here is credit card debt with minor medical debt. I would certainly recommend a Chapter 7 bankruptcy for Mr. Loomis because he does not have the income to support his debt servicing. If he is able to file a Chapter 7 bankruptcy, he could eliminate the credit card debt, start saving a little bit of money per month and be able to breathe again. If he continues down the same path that he is going, is going to be paying minimum payments for the next 10 to 15 years while he remains restricted and not being able to save any money. So Mr. Loomis, Chapter 7 is my recommendation for your particular situation.
