Is chapter 13 better than chapter 7 in Louisiana if you own real estate?

If you file bankruptcy in Louisiana with real estate, the good news is that you do have some significant options available to you. Keep in mind that these two forms of bankruptcy are very different and it is often up to you to determine which is the right option for your individual case. However, there are circumstances to consider carefully in situations of real estate ownership.

Chapter 13 or Chapter 7

In Louisiana, the state has a homestead exemption of $15,000. This means that if you file bankruptcy under Chapter 7 and your home’s equity value, which is the amount of your home’s value minus the mortgage you have on it, is under this limit, the home is protected from seizure of creditors or the bankruptcy court. If your home’s equity is higher, the court can force the sale of the home.

However, there are a few more things to take into consideration in regards to this particular type of situation.

• If your home is valued over this amount, file Chapter 13. Most credit card debt and unsecured loans are discharged in this form, but assets, including your real estate, are not sold.
• Chapter 13 is better but only if your debts are going to be reduced enough. Note that if you cannot afford the monthly repayment towards this form of bankruptcy, it may not be a good option for you.

Overall, Chapter 13 is an acceptable option if you have the means to continue to pay back the funds as no property is lost in the process.

Hire an Attorney

Before you make decisions about how to file bankruptcy in Louisiana with real estate, talk to an attorney. Find out the best way to protect your property.