Bankruptcy in Louisiana

Are you contemplating bankruptcy or hiring a bankruptcy attorney in Louisiana? Are you tired of creditors calling for payments you can’t make? Maybe looking for a way to get out of debt and have you exhausted all other options? Then bankruptcy might be the solution you seek. It is a legal option that can erase a portion or all of your debts.

Types of Bankruptcy in Louisiana

Bankruptcy is a legal process that helps individuals and businesses get a fresh financial start. It eliminates a portion of or all of their debts or financial liabilities. In Louisiana, to be approved, individuals must prove they have a hardship that prevents them from staying current on their financial obligations. Keep in mind that not all debts qualify. Some liabilities, such as child support arrears, delinquent taxes, alimony, and student loans generally do not qualify for discharge. Consumers who find themselves falling behind in debt can file either Chapter 7, 11 or 13. To determine which option is right for you, you’ll need to assess your goals, assets, and income. Also, you should consider working with an experienced bankruptcy attorney.

You may have to appear at 1 of 3 federal bankruptcy courts in the state during your case. You can wind up in the United States Bankruptcy Court of the Western, Middle, or Eastern District of Louisiana.

Chapter 7 Bankruptcy

Many people find Chapter 7 to be the right solution for their circumstances because it provides them with the opportunity to start over financially. However, before filing for Chapter 7 bankruptcy, you should thoroughly assess your income and ability to repay what you owe. You should also speak with a bankruptcy attorney in Louisiana who can help you to decide if a liquidation plan is right for you.

Typically, individuals approved for Chapter 7 lack stable income or have experienced a change in circumstances that has resulted in an inability to manage their debts. Though Chapter 7 erases debts, the tradeoff is you may have to give up certain possessions, such as your home, car or some other assets. However, once you file your petition, an automatic stay goes into effect that requires all collection activity against you like foreclosures and garnishments, to stop temporarily. However, the automatic stay does not prevent all collection attempts. For example, if you owe child support or restitution for a criminal case, you are still liable for those payments.

The first step toward filing for Chapter 7 in Louisiana is figuring out if you are eligible. Nobody who makes more than the median income can use this form of debt relief. The U.S. Census Bureau currently reports this number is $26,295 for individuals and $49,460 for households at the time of writing. State and federal officials recommend considering other types of bankruptcy before filing. While you can stop mortgage collections, the long-term effects can prevent you from obtaining future loans.

Chapter 11 Bankruptcy

Chapter 11 bankruptcy is more complex than other types of bankruptcy. It is often used by businesses and certain types of people. It allows petitioners to restructure their debts with a reorganization plan, so they are easier to manage over a determined length of time, usually four to 18 months. The main benefit of Chapter 11 bankruptcy is that it does not require petitioners to sell off or liquidate their assets to pay what they owe. It does allow debtors to negotiate with their creditors a reorganization plan that enables them to stay current on their debts moving forward.

Federal courts charge a filing fee of $1,167 and $571 for miscellaneous administration costs to initiate Chapter 11 proceedings. These can get paid in installments, but the final payment must reach the government no later than 120 days after submitting a petition.  Beyond the typical paperwork and restrictions, Louisiana debtors must create a reorganization plan. The courts will not approve a proposal that does not involve using disposable income for the next 5 years to pay claims.

Chapter 13 Bankruptcy

Chapter 13 Bankruptcy is a debt restructuring or wage earners plan. In Louisiana after you file, the courts will assign a trustee to examine your liabilities and assets and ability to pay bills. Unlike other types of bankruptcy, Chapter 13 involves you restructuring your debt with a three to five-year repayment plan. The flexibility of this repayment plan will depend on what property you want to keep and how steady your income is. It may also give you the opportunity to have some or most of your debts discharged.

Federal judiciaries refer to chapter 13 as a wage earner’s plan because it gives individuals the ability to use their income to repay debts. To qualify, citizens from Louisiana need to have a 3 to 5-year plan to take control of their financial situation. As an added advantage, lenders cannot continue hounding people with debt collection efforts.

The Bankruptcy Process in Louisiana

There is never an ideal time to declare bankruptcy. However, if you are unable to pay off what you owe within five years, filing for bankruptcy can help you to lessen the negative impact on your situation and help you get back on track.

In Louisiana to begin the filing process, gather all of your financial records, including monthly expenses, debts, assets and annual income. This information is crucial to give the courts an accurate picture of your circumstances. Failure to provide all necessary information can result in your petition being denied.

The Louisiana State Legislature has passed laws that exempt certain types of property and income. Examples of protected interests to incorporate into your financial planning for bankruptcy are:

• Alimony and child support

• 75% of disposable income

• Tools of the trade for your profession

• Family portraits, pets, and musical instruments

• Firearms worth up to $2,500

• Up to $7,500 in equity in motor vehicles

At least six months before you file for bankruptcy, eliminate unnecessary spending. Do not run up the balances on your credit accounts. You’ll also need to complete an approved credit counseling course, usually online or over the phone. Credit counseling is necessary to help you learn financial literacy and help you learn better financial habits. Once you complete the course, you’ll receive a certificate of completion to include in your filing. If you don’t have the certificate of completion from the credit counseling course that you took, the courts will reject your bankruptcy petition.

Work With an Experienced Louisiana Lawyer

Hiring a local bankruptcy lawyer in Louisiana during this process can help reduce the costly risks of self-representation in court. An experienced bankruptcy lawyer understands state and federal bankruptcy laws. He or she can help you understand which laws apply to your case, especially which debts that can be discharged or can’t be discharged. An experienced Louisiana attorney can also offer you guidance to improve the outcome of your case.

Keep in mind that there are debt management alternatives and financial resources that may benefit you more than bankruptcy, such as debt consolidation. Though bankruptcy is an attractive solution, it is best as a last resort. Do you need immediate help? Then one of our experienced lawyers in Louisiana can guide you through the entire bankruptcy process. We can even help you connect with an attorney across Louisiana state lines.

Submit a request online or call us today at (866) 345-6784 to get in touch with an experienced lawyer in your area!