This is the bankruptcy case study for Tabitha who resides in Chicago, Illinois. She is not married and she has never filed a bankruptcy case before. She is not a homeowner as she rents on a month-to-month lease from a landlord who lives in Chicago. She does own a 2007 Jeep Grand Cherokee which is financed by fast loans in Elgin, Illinois. The finance company is known as a sub-standard finance company in that they deal with people who have poor credit. The interest rate on the loan is 720%. She owes $7,000 on the vehicle, the monthly payment is $340 per month, and she purchased the vehicle within the last year and a half.
In terms of personal property, she has a checking account at PNC bank, security deposit with her landlord is $1000, household goods she values at $1000, her clothing is worth $200, she has a term life insurance with a death benefit only, she has a 401(k) with $400 in it, and she has a potential lawsuit that she claims could be worth $490. She is single and she has three dependent children ages five, seven and nine. She has been working the past six months as a nurse earning approximately $30,000 per year. Her net take-home pay totals $2166.
Taking a look at her expenses, she pays $650 per month for rent, $130 per month for electricity, $90 for cellular phone, $25 for internet access $400 for food, $100 for clothing, $100 for laundry, $350 for transportation, $340 for her auto payment and $220 for student loans. In terms of debt, she owes Chase bank for an old repossessed auto. She owes peoples gas $1800, ComEd $4200, and the city of Chicago for parking tickets $2200. Based upon her income, her expenses and the type and nature of her debt, I would recommend a chapter 13 bankruptcy. Chapter 13 will allow her to consolidate her debt and pay monthly to a trustee approximately $275 per month. This figure will include the auto payment and the student loan payment that she is currently paying separately. Filing chapter 13 will also protect her driver’s license as the city of Chicago parking tickets will be paid back over a 60 month period. I do feel that she has available funds per month to fund a modest chapter 13 at the rate of $275 per month. If she finds that it’s not possible, she can make a decision on whether or not to surrender that high interest vehicle.
For more information about chapter 13, you can contact me at 847-520-8100. I will let you know how each chapter works and which chapter I recommend based upon your particular set of facts.
