Bankruptcy – Chapter 7 Recommended – Case Study

This is the case of Randolph Booker who lives in Warrenville, Illinois, DuPage County Illinois.  Mr. Booker has never filed a bankruptcy before.  He is not a homeowner and he lives with family so technical no landlord/tenant situation.  He has a 2011 Nissan Pathfinder that is financed by Nissan Motor Acceptance.  He is current on the vehicle.  He owes approximately $35,000 on it.  It’s worth about the same.  And his monthly payment is very high at $752 per month.

He has a checking account at Bank of America, no savings account; minor household goods worth approximately $1000 and minor clothing worth about $400.  He does have three shotguns and some golf clubs with a garage sale value of approximately $1000.  He has whole life insurance with no cash value.  He has a 401(k) with $90,000 on account.  And he has a tax refund that he’s expecting of approximately $1000.  He is single with no dependent children and he is currently unemployed.

In terms of income, he is bringing in unemployment of $766 every two weeks or approximately $1532 per month.  In terms of monthly expenses, he is not contributing anything for rent because he’s living for family but he does contribute towards the cell phone bill of $142, cable television of $110, food at $250, clothing at $150, laundry at $20, transportation at $130, recreation of $200 and that auto payment of $752.  So Mr. Booker is operating at a deficit since he has a very high auto payment and although he wants to keep it and is only income is unemployment.

During the past three years he has made anywhere from $10,000-$93,000 so he does have the ability to make some money.  He has closed a checking account at two different banks in the last year.  And he has had two different addresses in the last four years.  There are no co-debtors, no student loans and no income tax debt.  What Mr. Booker does have is $90,000 worth of unsecured creditors such as credit cards, medical bills and personal loans.  So it seems that when Mr. Booker was unemployed for an extended period of time, he lived on his credit cards and now he cannot afford to pay the minimum payments anymore.

In this case, I would recommend Chapter 7 fresh start bankruptcy.  Eliminate the credit cards, reorganize and get back on your feet and be able to save for your future.



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