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Pittsburgh, PA 15219
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Willie - An Overspender
Willie is a 38 year old professional male who worked for a major corporation in Pittsburgh. He had what was generally considered to be a good income, earning in excess of $45,000 per year.
In his case he had simply overused his credit cards and was approximately $30,000 in debt to several banks and big-box retailers. None of his debts were secured since his car was an older model, which had been paid off, and he rented his apartment. In fact, other than some used furniture and clothing, Willie owned nothing else of value. He had saved no money in the bank and figured that he was a perfect candidate for Chapter 7 Bankruptcy.
However, after an assessment of his income and expenses, Willie discovered that e was over the median income for a one-person household here, and in addition, he had a monthly surplus of $400 after his normal expenses were covered. Thus, he was not eligible for a Chapter 7.
By paying his surplus funds of $400 per month to the Chapter 13 Trustee, as part of his court enforced plan, Willie was able to repay almost 80 percent of his outstanding $30,000. In addition, he was able to eliminate all of the interest that would be due to these credit card companies.
The Chapter 13 was a benefit to the creditors who would will receive almost 80 percent of their debts repaid. It was also a significant benefit to Willie, because he was able to eliminate the other 20 percent of the debt to these creditors and was also able to eliminate interest, making Willie's $400 a month payment to his creditors much less than the amount he was paying prior to the Chapter 13.
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