Bankruptcy Case Study

This is the case of Carol Foreman who comes to us from Aurora, Illinois for information on debt relief and bankruptcy.  Carol does not own any real estate.  She is renting from a landlord who lives in Aurora, Illinois.  The lease is a yearly lease that expires in May.

In terms of vehicles, she has a 2004 for the Explorer which is paid in full and she has a 2006 Dodge charger which is financed by Nouvelle Credit.  She is up to date with her auto payment and would like to keep that auto.  She has a checking account at Harris but no savings account.  She has minor household goods such as a TV, some furniture, some audio equipment and she has normal clothing worth approximately $400.  She does have some minor jewelry which could be valued at approximately $1000.

She has a whole life insurance policy which has a $20,000 death benefit and $2000 cash value amount.  She has a 401(k) with only $400 in it and she owns about $800 worth of miscellaneous stock.  She has domestic cats which he claims are priceless.  She is currently separated.  She has no dependent children.  She has worked for the last 32 years at Molex and she is making approximately $1600 per month in her pocket, that’s after all kinds of taxes and other adjustments.

Her rent is $800 per month.  Her gas and electricity is $125 per month.  Her cell phone is $135.  Her food and groceries is approximately $340 per month and she has hundred $50 per month expended for transportation costs.  Her auto insurance is $86 and the life insurance payment is $18.50.  She makes approximately $20,000-$29,000 per year, depending on overtime and she has moved around a little bit in the last two years.  She is the only one obligated on her debts.  She does not owe for any student loans and all of her IRS debt is paid off.

The thing that has got this particular person down is credit card debt and medical debt.  The credit card debt is easily eliminated and the medical is also easily eliminated.  So in this particular case, Chapter 7 would be the best bet.  Chapter 7 fresh start bankruptcy would give Carol the ability to start saving money.  Carol would be able to keep her vehicles as long as she continues to make her monthly payment on that vehicle and she can protect all of her personal property because it falls under the amount that a trustee can take.  Therefore, all of her personal property is protected under Illinois law.  Chapter 7 would provide a fresh start in approximately 110 days and that is my strongest recommendation for Carol from Aurora.

 

 

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