Chapter 7 Will Work, But Debtor Should Continue To Look For Work

Case Facts

This is the case of Shannon Drake who comes to me from Joliet, Illinois. Shannon is seeking a potential chapter 7 bankruptcy filing and wanted to make sure she would fit in the qualifications. She does not own any real estate, she is not currently renting as she is living with family. In terms of assets, she owns outright a 2005 Toyota Highlander which has 114,000 miles on it in and has a market value of about $4000. In terms of personal property, she has a checking account and a savings account at Chase bank with an approximate balance of $215. She has normal household goods, normal clothing, no life insurance, no retirement accounts, she does not expect a tax refund and she cannot sue anybody for personal injury or workers compensation.

Household Facts

She is currently separated since August of this year and she has one minor child, a 15-year-old daughter. She is currently unemployed and she is receiving Link card which is a form of food stamps at the rate of $400 per month. In terms of monthly expenses, she just has her cell phone bill, her food, her gas, her auto insurance, and some miscellaneous expenses. As far as her statement of financial affairs, she has not worked in the last two years and prior to that she made $4500 for the year. She has no lawsuits currently pending against her, she has not had any property repossessed or returned, she has not closed a bank account in the last year, she does not own a safe deposit box and she has not been in any other address other than her current address for the past four years. She has no co-debtors, no student loans, and no income tax debt.

Debt Scenario

The real problem here is $20,000 worth of credit card debt ranging from Visa, MasterCard, Best Buy, T.J. Maxx, Walmart, and several small medical bills. The good news for Shannon is that chapter 7 fresh start bankruptcy will eliminate all of this debt. She will be able to get back on her feet within about 1 to 4 months, obtain future financing for another automobile, and start applying for some general unsecured credit. The bad news is that Shannon must find work to be able to sustain any kind of credit payments. Hopefully, in the next several months, Shannon will be able to become gainfully employed and will have eliminated all of her debt by filing chapter 7 bankruptcy.

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