There are a handful of components that are associated with financial troubles. A few common reasons include heavy debt, divorce, loss of a job, sudden illness, or home foreclosure.
In fact, the average credit card debt in Louisiana is a whopping $5,339 per person. In addition, foreclosure rates are also as staggering, one out of every 2,312 LA homes is currently in foreclosure.
If you find yourself struggling with similar situations, then you are more than likely struggling with other personal issues that come with dealing with debt. The fear of losing your vehicle, home or your money can drain a person mentally & physically. You have probably even considered Claiming Bankruptcy .
If you are thinking “Can I File Bankruptcy?” you are surprisingly not alone. Around a million people file bankruptcy each year in the US. Bankruptcy is a means established by the US Government to help struggling Americans find relief from heavy debt. You may want to consider bankruptcy if it’s best for you.
What Is Bankruptcy?
Bankruptcy gives people the opportunity to get out from underneath considerable debt while still working with lenders in a legal capacity. It is initiated by an individual filing a Petition with their nearest bankruptcy court. The Petition can be filed by a person or by spouses jointly. When the bankruptcy is complete, the filer will ‘exit’ and will have a chance for a fresh start on their finances.
Throughout the bankruptcy, a trustee is appointed to oversee the particulars of the matter. His or her responsibilities will vary and depend on whether the individual has filed for Chapter 13 or Chapter 7 bankruptcy.
Did you know that Louisiana ranks #18 in the nation for bankruptcy filings. In 2017 the number of personal bankruptcies was approximately 326 out of every 100,000 residents.
What Is The Difference Between Chapter 7 And Chapter 13?
People in Louisiana, who claim bankruptcy, will elect to file under Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code. Want to know the difference? Take a look at the descriptions below for more information:
In exchange for dissolving all past due debts, the trustee of the bankruptcy will liquidate the assets, such as cars, homes, and other property of value in a Chapter 7 Bankruptcy proceeding.
Debtors that were listed on the bankruptcy filing will be repaid with the proceeds collected during liquidation
If you have the means to pay some of your debts, a chapter 13 bankruptcy plan may work for you. The individual will be allowed to retain his or her valuable assets over a 3- to 5-year period.
In order to decide which type of bankruptcy an individual will file, they will have to assess their ability to repay using the Bankruptcy Means Test.
What Is A Bankruptcy Means Test?
The goal of the Bankruptcy Means Test is to determine who is eligible to apply for debt forgiveness through a Chapter 7 Bankruptcy. It considers your:
- income and expenses
- household size and composition
- debt-to-income ratio
If you do not qualify for Chapter 7 bankruptcy, you will be able to file for Chapter 13, as above-described.
What Are Bankruptcy Exemptions?
Specific states have certain exclusions that are enacted by congress as federal bankruptcy exemptions for filers. These exemptions will determine what you are able to retain throughout and after Chapter 7. In a Chapter 13 situation, the exemptions will determine what amount you will have to pay certain financial institutions in your repayment plan.
- Property you occupy up to $35,000, but cannot exceed 5 acres if the residence in a municipality, or 200 acres if not located in a municipality. Spouses may not double. As to obligations arising directly as a result of a catastrophic or terminal illness or injury, you might be able to exempt the full value of your equity (consult with an attorney).
- Cemetery plot and monuments.
- Spendthrift trusts.
- Living room, dining room, and bedroom furniture; clothing; chinaware, glassware, utensils, and silverware (but not sterling); refrigerator, freezer, stove, washer and dryer; bedding and linens; family portraits; musical instruments; heating and cooling equipment; pressing irons and sewing machine; arms and military accoutrements; poultry, household pets and 1 cow; engagement and wedding rings up to $5,000; disaster relief insurance proceeds; one motor vehicle up to $7,500; one motor vehicle modified for a person with a disability up to $7,500; guns and ammunition up to $2,500.
- The greater of the following: 30 times the federal minimum hourly wage per week or minimum 75% of disposable weekly earnings. The judge may approve an additional amount for a low-income debtor.
- Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).
- IRAS and Roth IRAs to $1,283,025.
- ERISA-qualified benefit contributions, if deposited more than 1 year before filing.
- Gratuitous payment given to employee or heirs from an employer.
- City of Alexandria employees
- City of Monroe bus drivers
- City of Monroe electrical workers
- School employees
- Court clerks
- District attorneys
- Municipal employees
- New Orleans sewage workers
- Orleans Parish school employees
- Parochial employees
- Voting registrars
- Police officers
- State employees
- Louisiana University employees
- Workers’ compensation.
- Unemployment compensation.
- Earned Income tax credit.
- Public assistance.
- Crime victims’ compensation.
Tools of Trade
- Tools, books, instruments, equipment, and one utility trailer needed for work.
- Fraternal benefit society benefits.
- Health, accident or disability proceeds.
- Life insurance proceeds up to $35,000 if the policy was issued within 9 months of filing; annuity contract proceeds.
- Group insurance policies or proceeds:
- Property of a minor child.
Want to know if you can include Student Loans in Bankruptcy or Medical Bills in Bankruptcy? Check out our Bankruptcy FAQ’s section.
Filing Bankruptcy Alone vs. Filing With An Attorney
You are not required by law to hire an attorney to declare relief. Individuals are permitted to represent him or herself as a pro se debtor. You will simply contact the local bankruptcy court and obtain all forms and requirements directly through them. Going it alone is not recommended.
Filing Bankruptcy without an Attorney
A basic Chapter 7 Bankruptcy that doesn’t have a lot of debtors or assets may be easy to manage on your own.
A basic bankruptcy that may not require an attorney might look like:.
- Your income is below the state median;
- You have no property;
- Your debts will be considered dis-chargeable.
Working With An Attorney
Most of the time, it is usually in one’s best interest to work with a bankruptcy attorney. A bankruptcy lawyer is there to represent you and not the creditors.
An attorney is also accustomed with exemption laws. Plus, they can come up with creative strategies to keep your assets through practical repayment strategies that are fair to everyone involved.
While you may have the fight and ability to manage a Bankruptcy on your own, it tends to make things a lot easier on an already stressful situation, especially when there is so much at stake.
What Does Bankruptcy Include?
Once you file for bankruptcy in LA, the courts put in place an order called an Automatic Stay. This order will stop debt collection calls, wage garnishments, and additional claims. Keep in mind that payments regarding child support and criminal cases will still need to be made during this time.
In any event, Bankruptcy will be able to include:
- credit card debt
- protection from eviction
- avoidance of foreclosure
- utility bills
- medical expenses
Again, unless you are filing a complex Chapter 13 case, you will lose all assets associated with a Chapter 7 Bankruptcy protection. You will, however, be able to prevent any and all collections from occurring as long as they were incurred before the date of filing and discharge.
Final Thoughts And Considerations On Filing For Bankruptcy In Louisiana
As you can see, there a lot of information associated with successfully filing for bankruptcy and then exiting it unscathed or satisfied. Only a licensed bankruptcy attorney can guide you through this arduous process, particularly when it comes to complex cases. Be sure to hire someone you respect and trust.
Bankruptcy Courts In LouisianaThe Lemoine Company Building
214 Jefferson Street
Louisiana Western Bankruptcy Court
300 Jackson Street
Louisiana Western Bankruptcy Court
Tom Stagg United States Court House
300 Fannin Street
Louisiana Western Bankruptcy Court
United States Courthouse and Federal Building
707 Florida Street
Baton Rouge,LA 70801
Louisiana Middle Bankruptcy Court
Hale Boggs Federal Building United States Courthouse
500 Poydras Street
New Orleans,LA 70130
Louisiana Eastern Bankruptcy Court
Additional Louisiana Resources
Foreclosure Help Program
Disability SSDI Benefits