Filing Bankruptcy In Louisiana

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Filing bankruptcy has both benefits and risks to the debtor.  In some cases, debts can be erased, so the debtor can get a fresh start.  However, it also means that bad credit will prevent major purchases for many years, even if financial fortunes improve.  For others, a restructuring can give the debtor the help needed to regain a stable financial future, or it can only serve to delay the loss of assets.

Louisiana Bankruptcy Topics

  1. Personal Bankruptcy Options
  2. Keep Your Home: Bankruptcy and Foreclosure
  3. Louisiana Exemptions to Bankruptcy Liquidation
  4. Options for Filing Bankruptcy
  5. Louisiana Bankruptcy Courts and Trustees


Options for Personal Bankruptcy in Louisiana

According to U.S. Bankruptcy Code, Title 11, debtors have the choice of filing Chapter 7 or Chapter 13 bankruptcy.  

Chapter 7 Bankruptcy

In Chapter 7 bankruptcy, debtors can receive a fresh start.  Many debts will be discharged, and the individual has a fresh start. However, certain assets will be liquidated, in an effort to satisfy the creditors.  In addition, the person will likely be unable to buy a new home or car for the next 7 years, even if finances improve.  In Louisiana, the median income for a single wage earner is $36,945, for a family of two it is $46,741, and for a household of three it is $52,628.

Chapter 13 Bankruptcy

In Chapter 13 bankruptcy, the wage earner, who may have taken a pay cut or had unexpected bills, may qualify to have his/her debts restructured to a more affordable repayment plan.  The debtor makes payments to the court trustee for distribution.  Current assets are retained as long as the individual continues to keep all payments current.  However, no one can have more than $1,010,650 in secured debt and $336,900 in unsecured debt.

Filing Bankruptcy during Foreclosure

People who file bankruptcy during foreclosure may/may not be able to keep the home.  If the process has already been started, before bankruptcy is filed, the lien holder can ask the judge to release the property for resale.  In some cases, it will be in time for those who qualify for a Chapter 13 bankruptcy.  However, it is important to contact a bankruptcy lawyer, if the debtor has gotten behind in paying bills and foresees no financial improvement.  The legal advice can reveal potential options.

Louisiana Bankruptcy Exemptions

Every state has a list of potential exemptions from the bankruptcy process.  The following chart includes, but is not limited to all of the exemptions in the state of Louisiana:

Type of Asset(s)

Details on Applicable Exemption(s)

Homestead

Husband and wife may not double, it cannot be worth more than $15,000, be more than 1 tract of land-or 2 if it contains a home, or exceed 160 acres. Spouse or dependent of decease can keep the property-or if it was part of the divorce settlement.

Insurance

Fraternal and society benefits, health or disability, group,  life insurance benefits up to $35,000-if filed in the last 9 months of the bankruptcy

Misc.

Items belonging to a minor child

Pensions

Gratuitous payments of employee or beneficiaries, qualifying ERISA

Personal Property

Household goods, firearms, clothing, furnishings and more, cemetery plot monuments, wedding and engagement rings that are worth no more than $5000

Public Benefits

Unemployment and workmen’s comp, compensation for crime victims, AFDC, aid to the disabled

Tools of the Trade

Everything needed to continuing working, including a truck that does not weight more the 6,000 pounds

 

Louisiana Bankruptcy Court Filing Options

Need Bankruptcy Advice?

Use a Bankruptcy Lawyer

Using a bankruptcy lawyer is highly recommended.  Legal advice can ensure that the debtor claims all applicable deductions, can answer the questions presented in court, files all the necessary paperwork, and files the bankruptcy that will provide for the best financial future for his/her circumstances.

Use a Filing Service

Using a filing service may save money initially, but it can also be very risky.  The service is only responsible for filling out the proper paperwork.  If something is missing, it will be the responsibility of the debtor.  The service cannot answer any legal questions or offer any advice that might affect the outcome of the bankruptcy.

File “Pro Se”

If the debtor chooses to personally represent the case, he/she can file pro se.  However, with all of the legal nuances, the extended list of potential exemptions and more, it can adversely affect that financial outcome of the case.  Unless well versed in Louisiana bankruptcy law, it is risky business.

Courts and Louisiana Bankruptcy Trustee Information

Louisiana Eastern District Court

C-151 Hale Boggs Federal Bldg
United States Courthouse
500 Poydras Street
New Orleans, LA 70130

Louisiana Middle District Court

Russell B. Long Federal Bldg,
Suite 139
777 Florida Street
Baton Rouge, LA 70801

Louisiana Western District Court

United States Courthouse,
Suite 2100
800 Lafayette Street
Lafayette, LA 70501

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