Other choices include debt settlement and a debt consolidation loan.
You could be facing financial hardship and wonder how bankruptcy works in Louisiana, specifically a Chapter 13 bankruptcy. Louisiana has just a 3.6% unemployment rate as of July 2022, but inflation pressures make daily living more difficult.
First of all, you may be considering filing bankruptcy in Louisiana and learning more about Chapter 7 and Chapter 13 bankruptcy.
Pursuing the right bankruptcy is a step because you will agree to a Chapter 13 bankruptcy repayment arrangement in a Chapter 13 bankruptcy that could take you the better part of three or five years or you will pursue a Chapter 7 bankruptcy.
Before you make up your mind regarding Chapter 13, it can be helpful to run you through an array of debt relief alternatives. Here, we will look at Chapter 13 bankruptcy in Louisiana.
Some of the aspects we will study include:
- Chapter 13 vs. Chapter 7 bankruptcy in Louisiana
- Louisiana Chapter 13 Means Test
- Chapter 13 Plan Payments in Louisiana
- Louisiana Bankruptcy Exemptions
- Where are the Louisiana Bankruptcy Courts Situated?
- Who are the Louisiana bankruptcy Trustees?
- Are there alternatives to filing bankruptcy?
Chapter 13 vs. Chapter 7 Bankruptcy in Louisiana
A Chapter 7 bankruptcy in Louisiana can also be termed as ‘liquidation bankruptcy’ or ‘straightforward bankruptcy’ as there is no repayment arrangement. Still, your property can be auctioned to settle unsecured debts in case you have massive equity in the properties that are above the stipulated bankruptcy exemptions. With a bankruptcy exemption, a specific part of the investment in the property is protected.
A Chapter 13 bankruptcy in Louisiana is basically a repayment arrangement where a part of your unsecured debts is repaid over three to five-year duration. By opting for Chapter 13, you will retain your assets and be free of debts that a Chapter 7 can’t discharge.
Nevertheless, in a Chapter 13 bankruptcy, you must have a stable stream of income to be eligible for debt forgiveness or bankruptcy discharge. During the period of the bankruptcy arrangement, you will be under the dominion of the bankruptcy court; therefore, you won’t be able to sell the property or incur more debts without the court’s permission.
Now, let us delve a little deeper into Chapter 13 bankruptcy in Louisiana.
Louisiana Bankruptcy Means Test
The Louisiana bankruptcy means test compares your earnings to other household’s income in Louisiana. In case your median income is lower than the state’s average earnings figure, then you are eligible for a Chapter 7 bankruptcy discharge.
And in the event you earn more than the average income in Louisiana, Chapter 13 will be more recommendable. Now, in some cases, some debtors can be eligible for Chapter 7 irrespective of the fact that their earnings are higher than the average income amount for their family size.
Furthermore, some specific living expenses are subtracted from gross earnings to establish disposable income. In case the disposable income surpasses a given figure, then you are not eligible for a Chapter 7 bankruptcy discharge. The Means Test data changes from time to time. So you must confirm that the data you utilize to calculate the Means Test is the most recent figures. At the moment, data used in Louisiana bankruptcy cases applies to bankruptcy cases filed on or after May 15, 2022. The Louisiana average income factors in the people in your household.
How much does it cost to file bankruptcy in Louisiana?
The cost to file bankruptcy depends on the chapter of bankruptcy you file. For example, the cost to file bankruptcy in Louisiana is $338 for a Chapter 7 bankruptcy and $313 for a Chapter 13 bankruptcy, but that does not include attorney fees.
Louisiana Bankruptcy Calculator
In Louisiana, Chapter 13 payment arrangements are calculated with some reasons in mind. Such factors include your disposable earnings, debts, assets, and most recent financial records and they can influence the amount in your Chapter 13 payment plan.
With a good Chapter 13 plan, you can lower auto payments, catch up on mortgage amounts, resolve tax debts, and even settle back alimony and child support payments (domestic support arrears.)
It can be challenging to calculate a Chapter 13 payment plan, so you can take a Chapter 13 calculator to approximate your Chapter 13 payment schedule. It is also possible to utilize the longer type of our Chapter 13 calculator to get a more accurate estimate of Chapter 13 payments.
Louisiana Bankruptcy Exemptions
Under bankruptcy exemptions, debtors can retain their assets even as they file for bankruptcy. These exemptions safeguard net equity (the worth of property after subtracting liens) in assets from creditors and the courts. In some states, debtors can opt between state and federal bankruptcy exemptions, but in Louisiana, they can only use state bankruptcy exemptions. Nevertheless, there exist two types of Louisiana bankruptcy exemptions to select from in the Chapter 13 process.
It is upon you to select one or the other. To be able to establish which group of exemptions can best safeguard your assets in bankruptcy cases, it is advisable to undertake a thorough analysis. You can find Louisiana’s bankruptcy exemptions in Louisiana’s law search. For example you can find the Louisiana homestead exemption through that search.
Remember that in a Chapter 13 bankruptcy, your payment arrangement can be influenced by your net equity in assets. So it means that utilizing the right bankruptcy exemptions can decrease your Louisiana Chapter 13 payment amount.
Where are Louisiana Bankruptcy Courts Situated?
Louisiana has three bankruptcy districts. Here are the Bankruptcy Districts for Louisiana.
- Central District of Louisiana – (Divisions – Ascension, East Baton Rouge, West Baton Rouge, East Feliciana, West Feliciana, Iberville, Livingston, Pointe Coupee, and St. Helena.)
- Eastern District of Louisiana – (Divisions – Assumption, Jefferson, Lafourche, Orleans, Plaquemines, St. Bernard, St. Charles, St. James, St. John the Baptist, St. Tammany, Tangipahoa, Terrebonne, and Washington.)
- Western District of Louisiana – (Divisions – Alexandria: Avoyelles, Catahoula, Concordia, Grant, LaSalle, Natchitoches, Rapides, & Winn. Lafayette: St. Martin, Acadia, Evangeline, Iberia, Lafayette, St. Mary, St. Landry, & Vermilion. Lake Charles: Allen, Beauregard, Calcasieu, Cameron, Jefferson Davis, & Vernon. Monroe: Caldwell, East Carroll, Franklin, Jackson, Lincoln, Madison, Morehouse, Ouachita, Richland, Tensas, Union, & West Carroll. Shreveport: Bienville, Bossier, Caddo, Claiborne, DeSoto, Red River, Sabine, & Webster )
In every district, there might be several divisions, and they are shown next to the districts listed above. You’ll find out that a division deals with several counties in its jurisdiction. When filing for Chapter 13, your county of residence will determine the division and district where your case will be heard.
Who are the Louisiana Bankruptcy Trustees?
In Louisiana, you’ll find bankruptcy trustees, and every one of them deals with cases depending on division and district. The United States Trustees website has the Chapter 7 trustees in Louisiana and the Chapter 13 trustees in Louisiana.
Your bankruptcy case will be administered by a trustee who will review your bankruptcy arrangement and forms. You can see the trustee information below.
What Are Other Debt Relief Options?
There are several options instead of filing bankruptcy in Louisiana. You can qualify for a bankruptcy discharge in Chapter 7 if you honor the income stipulations.
Other choices include debt settlement and a debt consolidation loan. If someone is pitching emergency debt relief in Louisiana, you may want to dig deeper just to make sure they are delivering what they are processing.
Your best bet may be to study all the debt relief alternatives on the table, compare the pros and cons, and choose the most suitable for you. For this, a debt relief calculator can help you estimate the cost, pros and cons and alternatives.