Assignment:
Tim Walker walks into your office and announces that he is officially up to his eyeballs in debt.
Specifically, he owes the following to the following people:
– $57,000 to Chase Bank in unsecured credit card debt
– $22,000 to Wachovia Bank in unsecured credit card debt
– $5,000 to his neighbor Bob, as Bob lent him that amount a few months ago interest-free.
– $11,500 to Ford Motor Credit Corp on a car loan that he used to buy a Ford Focus two years
ago. $178,000 on his first mortgage to the Federal National Mortgage Association (FNMA or
“Fannie Mae”). The loan is secured by his house at 21 Cedar Lane, Fakeville, New Tudor 66666.
– $18,750 to Citibank on a home equity line of credit that is also secured by his house
– $870 to Sears that he borrowed to buy a riding lawn mower two months ago. He bought the
lawn mower for $1,200.
– $8,400 to his ex-wife, Cindy in back alimony and child support payments, for which he has
been in arrears for a couple of months.
– $7,600 in back taxes and penalties that he still owes the IRS from failing to pay his taxes for the
last two years.
Tim tells you that he owns the following assets:
– His house at 21 Cedar Lane, Fakeville, New Tudor 66666. He estimates the house’s fair market
value as approximately $220,000.
– A checking account at Fakeville Bank, account number 12345678. Its balance is about $780.
– His Ford Focus (referenced above). He estimates the car’s current market value at about
$10,000.
– Hi riding lawn mower. He estimates that it’s worth about $1,000 now
– A Baume and Mercier wristwatch that he received as a gift several years ago. He thinks it’s
worth at least $3,000, but he’s not sure exactly how much it’s worth
– An Individual Retirement Account with about $18,000 in securities held in it. – He owns a patent on a device that he invested called the “beer umbrella.” He has no idea how
much it’s worth, if anything, as no one has, as of yet, offered to produce and market the product.
– Clothing. The only pieces of clothing worth anything of significance are a suit he bought last
year for $400 and a nice trench coat he bought 5 months ago for $320.
Assume that New Tudor allows a homestead exemption up to $50,000 in equity for a residence
of the debtor.
Tim tells you that although he works, right now, he is spending more money than he makes every
month, and that’s with making only the minimum payments on his credit cards and home equity
loan. He has no interest in trying to negotiate or reorganize his debts. He just wants to get rid of
them, to the extent possible.
Please prepare an appropriate bankruptcy petition for Tim, along with all of the appropriate
schedules.
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