Bankruptcy Evaluation

This is the case of Gerald Cramer who comes to me from Homewood, Illinois about bankruptcy.  Mr. Kramer filed a bankruptcy back in 1996, so long ago that he is not even sure if it’s a Chapter 7 or a Chapter 13 but that’s okay since it’s more than eight years ago.  Mr. Kramer does not own any real estate.  He is currently renting on a month to month basis.  He has no vehicle whatsoever.  He is using a vehicle that is in his wife’s name.
He has a checking account at Charter One with approximately $700 in it.  He’s got minor household goods worth a couple thousand dollars and normal clothing worth approximately $1000.  He does have a 401(k) with $7000 available.  He does not have any pets, he does not expect a tax refund and he has no other interests in any stocks, bonds or corporations.  He is currently married, sometimes separated.  No dependent children.  He works as a flight attendant for the last 24 years earning approximately $51,000 per year.  At the end of the month, after he pays his taxes, he is left with $2700 net per month.
Let’s look to the all important expenses.  $1400 per month rent.  $50 electric and gas, $105 cellular phone, $138 for cable and Internet, $200 for food, $100 for clothing, laundry is $40.  He also has $800 in child support to another person who lives in Chicago, Illinois.  And he makes his credit card minimum payments of $200, leaving him with $3073 in expenses.  So his expenses exceed his income by a few hundred dollars.  Even if we take out the credit card payments that he’s currently making, he would still not have enough money per month to fund a Chapter 13 plan.
So based on that, I would recommend we talk about Chapter 7.  The income falls a little bit above the median but with the vehicle payment, I think he’s going to qualify.  He certainly does not have sufficient income to repay his creditors.  So Chapter 7 would be my recommendation.  The $22,000 in credit card debt would easily be eliminated in a Chapter 7 bankruptcy and that is my recommendation for Mr. Gerald Cramer from Homewood, Illinois.