This is the bankruptcy case study for Mr. Z who resides in Chicago, Illinois. He is currently married however his wife is not going to be filing with him. He has never filed a bankruptcy before either chapter 7 or chapter 13. He does not own any real estate as he is renting on a month-to-month lease in Chicago. He does not own a motor vehicle, he has a negative balance in his checking account at the credit union, he has a security deposit of $350, household goods valued at $2500, clothing valued at $1500 and no other property of any kind.
He is currently married with a non-filing spouse and no dependent children. He is currently unemployed and his spouse is working for the last six months making approximately $750 per month. He does have compensation coming as a veteran in the amount of $1652 per month. Thus, their combined household income is roughly $2400. When I look at the family’s expenses, they pay $550 for rent, $150 for electricity, $50 for cellular phone, $120 for cable TV, $350 for food, $60 for clothing, $40 for laundry, $50 for gas, $50 for recreation, and $50 for miscellaneous personal items.
Turning to the debt situation, there is approximately $24,000 in total debt. There is a repossessed auto with $4000 owed, there is a student loan with $3000 owed, there are bank balances, cash advances, and credit card debt totaling out the remaining $17,000. My recommendation in this case would be a straight-forward chapter 7 bankruptcy. Only Mr. Z needs to file as his wife does not need to file as the debt is only in his name. The amount owed to the credit cards, medical bills, payday loans, and miscellaneous debt will all be eliminated in a chapter 7 fresh start. The only debt that will survive his bankruptcy is the non-dischargeable student loan debt.
The result in this case would be a complete elimination of all debt other than the student loans. The total cost for a chapter 7 would range between $750 for the attorney’s fees up to $1500 for the attorney’s fees. The timeframe for the case is court within 4-6 weeks and a total discharge within 110 days. The only outstanding issue is whether or not the non-filing spouse has separate debt which would make it feasible her to file jointly. We will investigate that in the upcoming days.
