This is the bankruptcy case study for Ms. V. from Chicago who is visiting us today to learn more about chapter 7 bankruptcy. She is currently living in Chicago and has resided in the same address for more than two years. She is single so we do not need to talk about a non–filing spouse. She did file a chapter 7 bankruptcy back in 2003 and thus is eligible for another chapter 7.
In terms of real estate property she has a single-family home located in Chicago with a market value of $180,000. The outstanding mortgage to Bank of America is $160,000. Since her equity situation is $20,000, she will be able to file a chapter 7 and protect the equity in her property. She is currently up to date on the property and her current payment is $1294. In terms of vehicles, she has a 2013 Nissan Altima which is financed through Chase Bank. She is current on that vehicle and wishes to reaffirm the debt and keep the vehicle. In terms of personal property, she has a checking and a savings account with very little in each, minor household goods, normal clothing, term life insurance with a death benefit only, a 401(k) with a balance of $66,000, a tax refund to be expected in the amount of $3000 and two dogs valued at $100.
She is single and she is working for Jewel Foods and has been working in that capacity for the last 22 years. She earns approximately $3000 per month take-home pay from her job. Let’s examine her monthly expenses. Her mortgage is $1294 per month, water and garbage is $133 per month, electricity and gas is $443 per month, telephone cable and Internet is $200 per month, cellular phone is $333 per month, food is $400 per month, clothing is $100 per month, gasoline and transportation is $250 per month, auto insurance and life insurance combined is $147 per month, her auto payment is $407 per month, her La Fitness membership is $18 per month and her entertainment budget is $50 per month.
In terms of financial affairs, she is earned approximately $41,000 per year for the past three years. She has not received any unemployment or Social Security in the past three years. She is not being sued at the present time. She has not closed a bank account in the last year. She did have a prior address in Chicago three years ago.
In terms of debts, she has credit card debt totaling $35,000 and no other debt. What I would recommend here is a chapter 7 fresh start bankruptcy. We can eliminate the miscellaneous credit card debt and the debtor can continue to keep her car and her house provided she makes payments on those items. The case would be filed and a hearing would be held approximately 4 to 6 weeks after filing. The trustee in chapter 7 bankruptcy would examine the debtor under oath to determine that there are no significant assets that could be taken and sold for the benefit of creditors. The debtor would receive a discharge approximately 2 months after that meeting with the trustee. Thus, my strong recommendation in this case would be a chapter 7 fresh start bankruptcy to eliminate the $35,000 worth of credit card debt.
