Louisiana Bankruptcy: What are the Laws regarding Bankruptcies in the State of Louisiana?
In a world where money plays an important role, it is quite common to face a financial situation where you have to file for bankruptcy. For example, you were working in a high paying job in a successful company. However, the business had to close down, which forced you out of a job. As you had several bills to pay on time, it put a sudden strain on your budget. Despite applying for several positions, you were unable to find employment, which put you several feet under water, in debt.
There are numerous reasons on why you want to file for bankruptcy. Your financial advisor helped you understand that you are better of starting fresh rather than dealing with all the debt and all the problems that come with it.
As the process of filing for bankruptcy tends to be confusing, here are all the laws regarding this financial decision in the state of Louisiana:
Types of bankruptcies in Louisiana
There are two types of bankruptcies that individuals opt for:
Referred to by people as liquidation bankruptcy, it is an option which allows you to settle your debts by handing over non-exempt properties to the creditors. Once you file for Chapter 7, the creditors have to stop all their efforts to collect the debt from you.
According to the current laws, there is no minimum amount of debt you need to have, to be eligible for this option. Co-signers will have to deal with your outstanding payments unless they opt for bankruptcy protection.
When you file for Chapter 13, you and the creditors agree, that you will pay off your debts within a given time frame. The amount you pay depends on your projected disposable income, inclusive of your living expenses.
Unless the Bankruptcy Court gives permission, the creditors have no right to contact you or take action to collect the remainder of the debt. Co-signers don’t have to worry, as they have complete protection from creditors.
At the same time, you can categorize your debt, and pay different amounts to various creditors. As a result, it becomes easier to handle your finances, when there is a co-debtor. Under this option, your debts will stay with you for three to five years.
Louisiana – Community Property State
According to the current laws, Louisiana falls under the category community property state. Due to this reason, any debts your spouse collects during your marriage will fall on you equally. Creditors can hold you liable, even if you didn’t sign any documents which state otherwise.
How to file for bankruptcy?
You need to head to the U.S Courts form page to download the necessary application to file for bankruptcy. Keep in mind that you have to enter details such as financial transactions, expenses, credit accounts, property, and income. Only when you give the necessary information while the Louisiana Bankruptcy Court consider discharging your debt.
Before you file your case, you need to complete a credit counseling session with a licensed provider recognized by the state. Also, for Chapter 7 type bankruptcy, you need to pass the means test. It is a procedure where you prove that the income of your family is below the state’s median income. Another suitable condition is whether you have enough finances to make considerable payments to your creditors, after deducting your living expenses.
Give below are the fees you must pay while filing for bankruptcy:
- Chapter 7 - $335
- Chapter 11 - $1,717
- Chapter 12 - $275
- Chapter 13 - $310
Do keep in mind that the government can change these rates. Due to this reason, it is essential you check with U.S Court's official website before filing, so that you are up-to-date with the fees.