Bankruptcy Advice For Carolyn Raney

This is the case of Carolyn Raney who is from Deerfield, Illinois who is coming to see me for a debt relief consultation.  Ms. Raney filed a Chapter 7 back in 2002 so she is eligible once again since it’s been over eight years.  She owns no real estate and she is currently living in a rental arrangement with a yearly lease which expires in June.
She does not have a vehicle.  She has a Chase checking account with approximately $500 in it, a security deposit with the landlord of $2500, $100 for normal clothing, $1000 for normal household goods and she has term life insurance with a death benefit only.  She receives maintenance at $1400 per month and she has two dogs.  She is divorced with three children and she is currently working as a patient care coordinator in Buffalo Grove, Illinois.
In terms of income and expenses, she earns approximately $1950 per month.  She also receives maintenance of $1400 per month so she is looking at about $3500 in income from all sources.  In terms of monthly expenses, she’s got $1790 for rent, $50 for water and garbage, $250 for power and electric, $110 for cable television, $550 for food, $120 for clothing, $50 for laundry, $120 for medical, $350 for gas and tolls, $125 for recreation, $50 per month for auto insurance and $43 for life insurance.  She also has kid’s health insurance for $200 per month.  When you look at her income minus her expenses, there really is not enough money to repay the debt through a Chapter 13.
Over the last three years, she has earned approximately $29,000 per year.  She did have a prior address back in 2009 and 2010 in Deerfield, Illinois.  She does have a co-debtor on multiple accounts that would be affected if she files a Chapter 7.  Remember, in a Chapter 7, only the debtor is eliminated of the debt.  So a creditor would have a right to go after the co-debtor.  In terms of income tax debt, there is federal debt owed from 2005, 2006 and 2007.  Provided that Ms. Raney filed a return each year, those debts can be eliminated in a Chapter 7 bankruptcy.
So that is my recommendation.  I would recommend a Chapter 7, get a fresh start, eliminate the debt, the credit card debt, the medical bills, and the personal loans and get back on your feet financially where you are able to support yourself and your children.  So Chapter 7 is what I recommend for Ms. Raney from Deerfield.