This is the case of Diana Carpenter who comes to see me from Chicago, Illinois; Cook County. She’s interested in a consultation for debt relief. She has never filed the bankruptcy before. She is not a homeowner. She is renting and her landlord has her on a yearly lease which expires in November. She has a 2003 Jeep Cherokee which is not paid in full; her monthly payment on that vehicle is $359. She owes approximately $10,000 to pay it off and the vehicle is worth anywhere from $10,000-$12,000. So she has very little equity in the vehicle. As long as she continues to make her payments and she is current on those payments, she will be able to reaffirm that debt without a problem.
In terms of property and assets, she has a checking account at Chase with no balance. She is very minor household goods valued at $500 and minor clothing valued at $500. She does not have a retirement or pension or profit sharing. She does not own any stocks. She is not entitled to any support. She does not expect a tax refund. She does not expect to inherit any money within six months. She has no lawsuits or claims for potential personal injuries. She has no animals and she has no other assets whatsoever. She is a single mom and she has five children living at the property with her.
She is a security officer for the past four years working for Guards Mark Security and she is earning approximately $2000 per month. She’s paid every other week. Now, in addition to the $2000 a month, she does receive child support at $100 a week. So you can add another $430 on top of that $2000 for a net of $2430.
Let’s look at her monthly expenses. She’s got $627 for rent, $700 for electricity and gas, $180 for home phone, $600 for food, $500 for clothing for everybody, $200 for laundry and dry cleaning, $200 for transportation and $97 a month for auto insurance and then her auto payment once again is $359. When you look at all of her expenses in total, she is extending at least the $2430 that she has bringing in. Thus, she would qualify for Chapter 7 on the basis of budget and on income.
Let’s look at her Statement of Financial Affairs. So far this year, she has earned $10,000. The last two years, she has earned approximately $25,000. She does have a lawsuit with them last year from Spring Leaf Financial. She did have a vehicle repossessed which was a van back in 2011. She has not closed the bank account. She does not have a safety deposit box. She has been at her same address for the last three years. She has not owned a business in the last four years. She does have one co-debtor on that repossessed van and even if she files in Chapter 7 bankruptcy, that creditor has the right to collect against the co-debtor. She does not owe any student loans and she does not owe any tax debts.
A pretty simple solution here for Diana if she wants to take advantage of the federal bankruptcy laws, I would recommend a Chapter 7 fresh start. We can eliminate the credit card debt. We can eliminate the medical debt. We can eliminate the little personal loan that she has. In addition, she can keep her vehicle by reaffirming that debt on it and as far as the repossessed vehicle, the creditor has the right to go after the co-debtor but that’s the way it goes. This is an individual case so we are only worried about our client in this particular case. So that’s my strong recommendation; a Chapter 7 fresh start. Diana has a lot of people that she has take care of on a very limited income and this is exactly what Chapter 7 and the bankruptcy code is all about; providing relief to those who really need it through no fault and through no dishonesty on their part.
