Bankruptcy Case Study For Stacy
This is the bankruptcy case study for Stacy, who resides in Skokie, Illinois. She is interested in filing a chapter 7 bankruptcy case. She wants to know whether she qualifies, what the cost is, what the requirements are, and how long the case takes from start to finish. Let’s examine the facts of her case.
Assets
Stacy is not a homeowner. She is currently renting on a yearly lease which expires in May. She has a 2013 Infiniti vehicle which is financed by her credit union. The value of the car is $29,000 and she owes approximately $29,000 to pay it off. Her monthly payment is $640 per month. She is current and she wishes to keep that vehicle. There is also a co-debtor on the vehicle so she certainly wants to continue to pay the vehicle to protect the co-signer. In terms of personal assets, she has a checking account and a savings account at Chase Bank with an approximate balance of less than $1000. She has a security deposit on hand with her landlord totaling $1500. She values her household items at $1500, her clothing at $300, and she has no other property at all.
Expenses
She is currently single and she has one dependent child that resides with her. She is currently working as a recruiter and she earns approximately $18,000 per year. When we look at her net income, she has approximately $1300 coming in from her job, $415 per month coming in for child support, and she receives a housing voucher in the amount of $600. When we total up all of her income from all sources she has approximately $2300 coming in per month. In examining her monthly expenses, she pays $970 per month for rent, $70 per month for electricity, $45 per month for cellular phone, $45 per month for internet, 400 per month for food, $50 per month for clothing, $30 per month for laundry, $220 per month for transportation expenses, $140 per month for auto insurance, $30 per month for life insurance, $100 per month for child care, and $640 a month for her auto payment. When we examine her income versus her expenses, it appears that she does not have available money per month from which to pay her debts.
Debts
Her debts consist of a federal student loan which is non-dischargeable in the amount of $150,000. In addition to that debt, she maintains credit card balances totaling $35,000. Lastly, she has the auto debt totaling $29,000 which is co-signed and she wishes to protect the co-debtor and continue to pay the debt. The advice for Stacy would be to file a chapter 7 bankruptcy. Chapter 7 will eliminate the $35,000 credit card debt, and allow her to put more of her disposable income per month towards her non-dischargeable student loan debt as well as make it easier for her to make her household expenses and her car payment.
The case will take approximately 120 days from start to finish. The cost for a case such as this would range between $1,100 and $1,600 depending on a few different factors that are beyond the scope of this case study. She should gather her most recent two months’ worth of paycheck stubs, her most recent federal tax return and any other information that she may have concerning her debt and bring that to her office consultation with an experienced, bankruptcy attorney. In closing, it is my strong opinion that chapter 7 will provide the greatest form of relief for Stacy from Skokie, Illinois.
