This is the Chicago bankruptcy case study for Michael who lives on Kostner Avenue in Chicago, Illinois. He is in the office to discuss whether or not chapter 7, fresh start bankruptcy is going to be advisable. In terms of real estate, he owns no real property. He currently lives with his family so there is no formal landlord-tenant arrangement. He owns a 2012 Ford Edge which is financed by Chase and the approximate monthly payment is $716 per month. He also owns a 2012 Harley-Davidson Fat Boy which is financed by Harley Davidson financial with a monthly payment of $440. He also owns a 2007 Nissan Xterra which is financed through Archer Heights credit union, with a monthly payment of $100 per month.
In terms of personal property, he has a checking account at Chase bank with a zero balance and no savings account. He has minor household goods valued at $300, normal clothing valued at $200 and a term life insurance policy which has a death benefit only. He has no personal property otherwise in his possession. In terms of his marital status, he is single with no dependent children. He is currently working as a mail carrier for United States Postal Service earning approximately $32,000 per year. When we look at his monthly income, he is bringing in approximately $1700 per month after taxes. In terms of monthly expenses, he pays $500 for rent, $50 for electricity, $75 for telephone, $265 for cellular phone, $100 for cable TV, $350 for food, $50 for clothing, $250 for transportation expenses, $70 for health insurance, and $100 for auto insurance, and installment payment plans of $440 for his auto.
In terms of his statement of financial affairs, he has earned approximately $32,000 per year consecutively for the last three years. He has not received any unemployment or Social Security benefits in the last three years. He is not involved in any lawsuits, he has not had any property repossessed or returned, he has not closed a bank account in the last year, he does not own a safe deposit box, he has not been in any other address other than his current address in the past three years, he has not sold or transferred any real estate in the last four years, and he has not owned a business in the last four years.
The issue for Michael is that he has over $8000 worth of credit card debt and $5000 worth of medical bills. Michael would be a chapter 7 bankruptcy candidate in that we can eliminate all of his debt and get him a complete fresh start. He must continue to pay for the vehicles if he wishes to keep the vehicles. If he decides to surrender the vehicles, then he does not need to make any further payments. The chapter 7 bankruptcy case will last anywhere from 3 to 4 months, with one court date, and all creditors will get a notice that he filed and they are prohibited from contacting him directly from that point forward.
My recommendation for this case is a simple, straight-forward, chapter 7 bankruptcy. Michael will be able to get a complete fresh start and maintain the property that he wishes to keep provided he continues to make his monthly payments on those vehicles.
