Bankruptcy – Chapter 7 Is The Best Recommendation

This is the Chapter 13 case of Gail Urbanetti who comes to me from Ingleside, Illinois.  She’s interested in Chapter 13; the bottom line is she has a lot of equity in her house and a lot of credit card debt.  The specific facts of her case are as follows: she lives in Lake County, Illinois.  She filed bankruptcy 25 years ago so she is eligible for either Chapter.  She has a single-family home with a market value of $225,000 and an outstanding mortgage balance on that home of $74,000 through Healthcare Associates Credit Union.  So she has a lot of equity in her house.  She’s not renting from anybody, nobody is renting from her.

She has a 2003 Pontiac Grand Prix which is paid in full with approximate value of $5000.  She has a 2006 Chevy Impala which is paid in full with an approximate value of $10,000 and she has a 2007 Chevy Cobalt with an approximate value of $6000 and that vehicle is paid in full.  So she has three vehicles totaling $21,000 in equity.  They are all paid in full with no liens against the vehicles.

In terms of personal property, she has a checking and savings account with approximately $2000 in each.  She has normal household goods valued at about $4000, normal clothing valued at about $800.  She does not have an IRA, 401(k), profit-sharing or other stock, bond or any other retirement account.  She cannot sue anybody for personal injury or workers compensation rights.  She does not have any lawsuit pending.  She does not have any animals and she does not expect to inherit any money in the next six months.

In terms of family, she is widowed and she has three minor children ages 14, nine and three.  She is working for Highland Part Hospital and she has been working there for the last 20 years earning approximately $54,000 a year.  She’s paid once a week and she has income from the job as well as deceased husband’s pension income at $850 per month.  If you take all of her income from her job and the deceased husband’s pension, she nets $3668 per month.

When we go through her monthly expenses which includes the mortgage of $265, property tax of $280, home repairs of $100, food at $450, clothing at $25, laundry $25, medical and dental $175, gas, tolls and transportation $150, recreation, $20, automobile insurance $81; she has total expenses of $2465 leaving approximately $1200 per month that can go towards the repayment of her debt.

Let’s talk about her debt.  She’s got $36,000 owed on a credit card through Amazon.  $3000 owed to Capital One, $1700 owed to Wal-Mart, $5500 owed to Chase Bank.  And then she has an assortment between Exxon Mobil, Capital One, CitiCard, Capital One, Capital One, another Capital One and another Chase totaling over $75,000 worth of total credit card debt.  So my recommendation to Gail is to do a Chapter 13, repay approximately $1200 per month over the course of 60 months and repay the credit cards either in full or at a percentage of the dollar is it turns out that the amount that she is paying over 60 months doesn’t pay the debt in full.  Chapter 13 is the answer for Gail Urbanetti from Ingleside, Illinois.

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