This is the bankruptcy case study for Mr. O. who resides in Joliet, Illinois. He has never filed a bankruptcy case before. He does not own any real estate. He is currently renting on a month-to-month basis. He does own a 2005 Mitsubishi Gallant which is valued at $5000, the debt associated with the vehicle is $8000, the monthly payment is $296 and the finance company is Capital One Auto Finance. The debtor is not current on the vehicle as he is $1200 behind however he intends to catch up and keep it. He does not have a checking account or a savings account. He values his household goods at $700, his clothing at $400 and he has no other property at all.
In terms of his personal situation, he is single with no dependent children. He is currently working as a custodian and he has been working in that capacity for the last five years earning approximately $21,000 per year. After taxes, his take-home pay per month is $1225. In terms of monthly expenses, he pays $450 for rent, $40 for cellular phone, $350 for food, $50 for clothing, $50 for laundry, $250 for transportation, $118 for automobile insurance, and $296 for his auto payment. When we look at his income versus his expenses, he is running a deficit. This fact will allow him to qualify for a chapter 7 bankruptcy.
His debts are as follows: he has $18,000 in credit card debt, $10,000 in medical debt, and $4500 in a prior auto deficiency. He has been served with garnishment papers and is concerned about losing 15% of his check each pay period. As I mentioned earlier, he is already running at a slight deficit each month. Should that additional 15% be deducted for garnishment, he will certainly be in a negative situation likely unable to pay his rent going forward.
Based upon the facts above, I would recommend a chapter 7 fresh start bankruptcy. We can eliminate all of his debt, stop the garnishment, and give him an opportunity to get up to date on his vehicle payment. The filing will require one court date approximately 4 to 6 weeks after the case is filed. Since he lives in Joliet, Illinois, the court location will be in Joliet as well. Then 60 to 90 days after his court date, he should receive a discharge letter in the mail which lets him know, his creditors know and the rest of the world know that he is no longer responsible legally for those outstanding debts. So my recommendation for Mr. O. in this relatively simple case is a straight-forward, chapter 7 fresh start bankruptcy.
