BK Case Study #1
A couple in their mid 50’s is struggling with credit card debt. The husband went from making approximately $70,000.00 per year to being unemployed for over 19 months. Their credit card debt is approximately $90,000.00. The husband has been sued by 4 creditors who were able to obtain judgments. The wife has been a substitute school teacher for 1 ½ years and makes $23,000.00. The husband is currently working at a commission based job and averages $1500.00 per month. The couple has filed for Chapter 7 bankruptcy before. However, it has been more than 8 years.
Answer:
The couple would be good candidates for a Chapter 7 Bankruptcy. Under the 2005 Bankruptcy Act, their current income after doing the “means test” would make them eligible for a Chapter 7 without the presumption of abuse. Since, it has been more than 8 years since their last bankruptcy filing; they are eligible to file for a Chapter 7 without any recourse. Filing a Chapter 7 Bankruptcy would immediately stop all debt collections and judgment efforts to collect on the debts. The couple would receive a “Discharge” and be able to have a fresh start.
*Note- This is the attorney's own PERSONAL assessment and NOT intended as legal advice
