Dolores has contacted me to determine whether or not bankruptcy is a good option for her. She filed a chapter 7 back in 2004 so she is technically eligible for either a chapter 7 or a chapter 13, which is best for her. She lives in a single-family home, however, the home is not in her name. She does not have an automobile and she has very little in the way of personal property. She has a checking account and a savings account at Chase bank with less than $50 combined. She has minor household goods which she values at $300. She has clothing which shs values at $300. Other than that, she has no other personal property whatsoever.
She is currently married and she has five children residing in the house with her and her spouse. Two of the children are emancipated adults and the rest are minors under the age of 18. Both her and her spouse are currently working. Their combined income amounts to $9500 per month take-home pay. Thus, we have a married couple that is bringing home more than the average family for their family size. Moving to their expenses, there is a home mortgage at $2611 per month, association fees at $270 per month, electricity at $280 per month, telephone at $220 per month, food at $800 per month, medical expenses at $100 a month, transportation costs of $400 per month, automobile insurance at $100 a month, child care at $240 per month, and husband’s auto which amounts to $600 per month.
When we examine their income minus their expenses, there appears to be approximately $400 available in disposable income which can be used for the chapter 13 repayment plan. The total debt is 50,000 which amounts to credit cards. By paying $400 per month over a five-year period, the couple will save approximately $30,000 that would not have to be paid back on the credit cards. In addition to that, the interest ceases so they are actually saving a lot more than that over a five-year period.
My recommendation for this case would be a chapter 13 repayment plan which would pay back anywhere from 30% to 40% of the total debt owed over a five-year period. This will allow the couple to have more disposable income per month and they are currently having right now with the high interest credit card debt that they are paying. This case is a perfect chapter 13 in that it will provide the necessary relief while paying less than the total amount due and owing.
To see if you qualify for chapter 13 bankruptcy relief, contact my office at 847-520-8100.
