In this bankruptcy case study, the debtor resides in Park City, Lake County, Illinois. She has resided in that same address for less than two years. Her prior address was in Waukegan, Illinois on Sunset Avenue. She has been a resident of Lake County, Illinois for the past 22 years. She has never owned a home as she is continuing to rent houses and apartments over the past 10 years. She is currently renting on a month-to-month lease from Colonial Park Apartments. She has a 2001 Toyota Corolla which is financed by Great Lakes Credit Union. The value of the vehicle is $3500, the amount owed on the loan is $1600 and her monthly payment is $110. There is a co-signer on the vehicle, she intends to keep it and it has 181,000 miles on it.
In terms of personal property, she has a checking account and a savings account at Great Lakes Credit Union. The total amount on account is less than $100. She has a security deposit with her landlord totaling $250, minor household items valued at $750, typical clothing and minor jewelry valued at $200, a 401(k) valued at $2000, and no other personal property. In terms of her description of household, she is single with a dependent child age 8. She is working for the past six years as a quality control specialist earning approximately $28,000 per year. She is paid every other week and after her monthly deductions from her paychecks she is netting $1900 per month. Turning to her monthly expenses: rent is $685, electricity and gas is $120, home phone is $30, cellular phone is $100, cable television is $70, internet is $40, food is $400, clothing is $100, laundry is $50, medical expenses are $25, transportation is $60, health insurance is $160, auto insurance is $95, life insurance is $5 and her auto payment is $110 per month.
In terms of her summary of financial affairs, she has earned approximately $24,000 per year for the past three years. She is currently being sued by Supreme Financial. She has not closed a bank account in the last year, she does not have a safe deposit box, and she does not have the ability to sue anybody for personal injuries. In terms of debts, she has a federal student loan in which she owes $20,000. This loan is non-dischargeable and she understands that fact. In terms of tax debt, she owes the State of Illinois approximately $4500 for two years of taxes. Since these taxes are within the past three years, they are non-dischargeable as well. Moving to the dischargeable debt, the debtor has approximately $15,000 worth of credit card debt, $2500 worth of uncovered medical debt, and $1500 worth of personal loans.
My recommendation in this case would be a chapter 7 bankruptcy. The debt owed to the student loan and to the State of Illinois for taxes will be non-dischargeable. However, the remaining debt which includes credit cards, medical bills and personal loans will be discharged. She can continue to make her $110 per month payment on her vehicle and reaffirm that debt. Thus, chapter 7 fresh start bankruptcy would be my strong recommendation this case.
