Ollie the overspender

Life was good for Ollie. He had a fast car, fast lifestyle and was fast with his cash. Live for the present was Ollie’s motto, and he bought a lot of presents for a lot of people. Then, his present turned into a disaster. His credit cards were pushed to the limit and he found himself deep in debt.

Ollie figured this would not be a problem. His car was older and he owned it free and clear. He did not own any real estate and, other than some used furniture and clothing and a few possessions, Ollie had nothing of any real value. His bank account was empty. Ollie read some articles on the Internet and thought he was a perfect Chapter 7 bankruptcy candidate.

But Ollie had a problem. He made $52,000.00 last year and, after his monthly expenses were taken into consideration, he had a surplus of $400.00 remaining. He was not eligible to file a Chapter 7 bankruptcy because he was over the median yearly income in the state of Pennsylvania for one person, and he had a surplus of funds remaining at the end of the month.

But he still had options, and a Chapter 13 bankruptcy was a very affordable and viable alternative.

By paying his surplus funds of $400.00 per month to the Chapter 13 Trustee, as part of his court enforced plan, Ollie was able to repay almost 80 percent of his outstanding unsecured debt.  Since the pre-Chapter 13 payments to his creditors were over $1,100.00 a month, he was also able to save over $700.00 in his monthly payments. In addition, he was able to eliminate all of the interest that would be due to the credit card companies, saving tens of thousands of dollars over the years it would have taken him to pay his accounts in full without the Chapter 13. He was able to pay his debts in five years as opposed to the 12 years it would have taken had he made the credit card minimum payments.

The Chapter 13 was a benefit to the creditors who would receive almost 80 percent of their debts repaid. It was also a significant benefit to Ollie, because he was able to eliminate the other 20 percent of the debt to these creditors and was also able to eliminate interest and save thousands of dollars. For a change, it was Ollie who was getting a present.