Bankruptcy in Louisiana
Is debt keeping you from moving forward? Financial stress can build over time and reach a point where it feels impossible to get ahead. That’s where bankruptcy can offer a legal way to reset—and start over.
Bankruptcy isn’t the end—it’s a chance to reclaim your finances. Whether you need the fresh start of Chapter 7 or the structured repayment plan of Chapter 13, filing can stop collections, prevent foreclosure, and give you space to breathe.
A Louisiana bankruptcy attorney can help you understand your options, avoid common mistakes, and file the right plan for your situation.
Ready to start fresh? Request a referral today and take your first step toward financial relief.
Types of Bankruptcy in Louisiana
Bankruptcy is a legal process designed to help individuals and businesses in LA get back on their feet when debt becomes unmanageable. When approved, it can reduce or completely eliminate certain financial obligations, offering a path to rebuild.
You must show that your financial situation prevents you from keeping up with your current payments. However, not all debts are eligible for discharge—obligations like child support, alimony, most student loans, and recent tax debt usually remain.
If you’re considering bankruptcy, it’s important to understand your options. Chapter 7 is typically used for quicker relief through liquidation, while Chapter 13 allows you to repay a portion of your debt over time. Chapter 11 is generally reserved for businesses or individuals with high-value assets and more complex financial situations.
In Louisiana, bankruptcy cases are handled by the United States Bankruptcy Court for the Eastern, Middle, and Western Districts of Louisiana. These courts serve residents throughout the state with locations in New Orleans, Baton Rouge, Lafayette, and Shreveport.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy can be a powerful option for Louisiana residents who are dealing with unmanageable debt and need a clean break. It’s often best suited for people who don’t have the income to support a long-term repayment plan.
Before filing, it’s important to carefully evaluate your earnings, financial obligations, and the value of any assets you might have to give up. A local bankruptcy attorney can help you determine if Chapter 7 fits your situation and explain what protections apply under Louisiana law.
Most people who qualify for Chapter 7 have limited or unstable income due to job loss, medical issues, or other major life changes. While this chapter can discharge unsecured debts like credit cards and medical bills, you may be required to surrender certain non-exempt property in the process.
To qualify for Chapter 7 bankruptcy in Louisiana, you must pass the means test—a calculation that determines whether your income is low enough to file under this chapter. The process begins by comparing your household income to the state median for a family of your size.
If your income is below the median, you typically qualify. If it’s above, additional calculations are required to assess your disposable income after allowable expenses. As of the most recent data, Louisiana’s median income figures for means testing are:
- 1-person household: $54,819
- 2-person household: $70,106
- 3-person household: $81,984
- 4-person household: $100,791
- Add $9,900 for each additional household member beyond four
Chapter 11 Bankruptcy
Chapter 11 bankruptcy is a more intricate form of debt relief, typically used by businesses or individuals with significant assets or complex financial obligations. Rather than eliminating debts outright, it allows you to reorganize what you owe under a court-supervised plan that often stretches between four and eighteen months.
Filing for Chapter 11 bankruptcy in Louisiana involves a detailed disclosure of your financial situation and a proposed plan for reorganizing your debt. Because this chapter is more technical and typically used by businesses or high-debt individuals, the paperwork must be thorough and accurate.
You’ll need to submit the following forms to the bankruptcy court:
- Voluntary Petition (Official Form 101)
- Schedules A/B through J – outlining all assets, liabilities, income, and expenses
- Statement of Financial Affairs (Official Form 107)
- Creditor Matrix – listing the names and addresses of all creditors
- Summary of Assets and Liabilities
- Disclosure of Attorney Compensation
- Recent financial documents – including profit/loss statements and balance sheets
- Proposed Reorganization Plan and Disclosure Statement – usually filed within the early stages of the case
Chapter 13 Bankruptcy
Chapter 13 bankruptcy, often called a wage earner’s plan, gives individuals in LA the chance to reorganize their debts while keeping important assets. After your case is filed, a court-appointed trustee will review your income, expenses, debts, and property to determine how much you can reasonably repay. You’ll then follow a three to five-year repayment plan tailored to your financial situation.
This structure allows you to catch up on past-due obligations, like mortgage or car payments, while keeping what matters most. If you complete the plan successfully, you may also be eligible to have some remaining unsecured debts discharged.
The process also involves more long-term oversight. After filing, you’ll begin making monthly payments to a trustee, who distributes those funds to your creditors according to the terms of your plan. Unlike Chapter 7, where debts are discharged quickly, Chapter 13 requires consistency and commitment. But for many, it offers a more sustainable way to stay current on essential payments.
The Bankruptcy Process in Louisiana
There’s no perfect moment to file for bankruptcy—but if your debts are growing and you don’t see a way to pay them off within the next five years, it may be time to consider your options. Bankruptcy isn’t a last resort—it’s a legal strategy that can give you the structure and protection needed to stop the damage and start rebuilding.
To begin the process in Louisiana, you’ll need to compile a clear and complete picture of your financial situation. That includes listing your monthly expenses, outstanding debts, assets, and all sources of income. The court relies on this information to determine your eligibility and guide your case forward. If your documents are incomplete or inaccurate, your petition could be delayed—or denied entirely. Getting the details right from the start is essential.
In Louisiana, the bankruptcy process follows federal standards, but you’re required to use the state’s own exemption laws to protect certain property during your case. These exemptions determine what assets you can keep in both Chapter 7 and Chapter 13 filings. If you’ve lived in the state for at least two years prior to filing, the following exemptions may apply:
- Homestead exemption: Up to $35,000 in equity in your primary residence
- Vehicle exemption: Up to $7,500 in equity if the vehicle is modified for a disabled person
- Personal property: Clothing, furniture, appliances, and tools of the trade (reasonably necessary items)
- Wages: 75% of earned but unpaid wages are protected
- Public benefits: Fully exempt, including Social Security, unemployment, workers’ comp, and veterans’ benefits
- Retirement accounts: Most tax-deferred retirement savings and pension plans are fully protected
Work With an Experienced Louisiana Lawyer
A knowledgeable bankruptcy attorney can guide you through each step, making sure your case is filed correctly and your rights are fully protected.
Submit a request online or call us today at (866) 345-6784 to get in touch with an experienced lawyer in your area!
About the Author
Aaron is a professional legal writer with a B.S. in English Education from Southern Illinois University – Carbondale. He has written, published, and edited thousands of legal articles for RequestLegalHelp, which has connected over 5 million people to legal help in the United States.
With over five years of experience writing thousands of legal articles for law firms across the U.S. and Canada, Aaron specializes in covering federal, state, and city-level legal issues ranging from auto accidents to wrongful terminations.
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