Bankruptcy Filing Software To Aid In Determining Chapter 7 or Chapter 13

This is the case of Duane Comersky who comes to me for a bankruptcy consultation.  Duane is currently residing on Laura Lai Street in Zion, Illinois, Lake County Illinois.  Duane has never filed for bankruptcy before; this is his first consultation with an attorney.  He does not own any real estate.  He is currently living with his uncle and paying rent, he is on a month to month lease.  In terms of assets, he has a 2007 Dodge Magnum which is financed through Baxter Credit Union.  He owes approximately $5400 to pay off the vehicle, he pays $450 per month and the vehicle is worth a little bit more than $5400 on the market.

In terms of property and assets, he has a checking and savings account with Great Lakes Credit Union with the approximate amount on hand of $200.  His household goods he values at $400, his clothing he values at $550.  He has a term life insurance with a death benefit only and he has $19,000 in a 401(k) account.  He does not have any other assets.  He does not expect to inherit any money.  He cannot sue anybody for any reason.  He is single and he has a dependent child age 5.

He is currently working at M-Co as an operator and he’s been doing that for the last eight years earning approximately $32,000 per year.  He is paid every other week.  He has child support coming out of his check.  He has retirement coming out of his check.  He has a retirement loan that he is repaying out of his check and he has normal taxes and Social Security as well as healthcare insurance coming out of his check.  So his net at the end of the month is $2669.

In terms of his monthly expenses, now these are his averages, $350 for rent, electric and gas $100, Comcast cable, Internet and phone approximately $204, $150 per month for clothing, $25 for laundry, $45 for out-of-pocket medical and dental, $250 for gasoline and transportation, $125 for transportation, $115 for health insurance and then he has life insurance at $180 per month.  He’s paying $200 per month in child care and he has an auto payment of $450 a month and he also provide school supplies at approximately $40 per month.

When you look at Duane’s income and expenses, he almost has enough to find a Chapter 13 but it’s a close call.  You’ve got to remember, his rent is really low at $350 so when you add up all his monthly expenses, he really is close to his income.

In the last three years, he has earned anywhere from $27,000-$32,000 per year.  He has not had any unemployment or Social Security in the last three years.  There are no lawsuits pending.  He has not closed a bank account.  He does not have a safety deposit box.  He has been at his same address for at least three years.  He does not own a business.  There are no co-debtors on any of his accounts.  He does not owe for any student loans.  He does not owe any tax debt.

In terms of debt, he has an auto deficiency for many years back with $600 still due and owing.  He has past-due utility bills of approximately $1940; he has about $700 in medical bills and credit cards outstanding of $7200.  This is a close call for Duane from Zion, Illinois.  If his expenses are equal to or greater than his income, then I would recommend a Chapter 7 fresh start and eliminate all of your debt and get back on your feet.  If, on the other hand, it turns out that you have $100-$300 available per month if you’re not making the minimums on the credit cards, then you might want to consider a very low and Chapter 13.  And here is the reason: Chapter 13 will effectively change the way you are paying for your vehicle.  Instead of paying $450 per month, we can probably lower that payment and payment through a Chapter 13 trustee while at the same time paying something on the credit cards, maybe as little as 10%.

So this is a case for Duane from Zion where I want to do a little bit more investigation and get all of his paid details up into the bankruptcy software so that I can give him an excellent idea of what it would take under Chapter 13 or whether it’s better to do a Chapter 7 and just continue to pay his car separately.  So we will definitely be getting back in touch with Duane Comersky from Zion, Illinois with the proper recommendation on which Chapter.  It’s going to be either a Chapter 7 or a Chapter 13 bankruptcy.



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