What’s the first thing that comes to mind when you think of Louisiana? Is it Mardi gras, the New Orleans Saints and hurricanes? One thing is for sure – debt isn’t anywhere on that list. However, credit card and medical bills can follow you everywhere, even to Louisiana.
If you have lived in Louisiana for at least a year and are haunted by unpaid bills and debt collectors, consider filing for Chapter 7 bankruptcy. Going Chapter 7 can erase most of your debts and give you a chance to enjoy the little things in life again.
Filing for Chapter 7 is Easier than Traversing the Bayou
Chapter 7 bankruptcy is also known as a straight or liquid bankruptcy, due to the fact that it wipes your debt out of existence. Once your credit card bills, medical debts and other assorted bills are gone, you won’t have to spend your days avoiding debt collectors and worrying about garnishments.
While Chapter 7 can erase most debts, it can’t eradicate all of them. Some of the things that Chapter 7 can’t erase are:
- Student loans
- Recently filed tax debts
- Child Support
Louisiana Residents Need to Qualify for Chapter 7
In order to file, you need a bankruptcy attorney to help you fill out your Chapter 7 petition and represent you in front of the judge and bankruptcy trustee (who represents your debtors). The first thing that your bankruptcy attorney will do is check the income limits for Louisiana residents, which are as follows:
- Family of 1 - $38,108
- Family of 2 - $46,704
- Family of 3 - $55,699
- Family of 4 - $67,239
- Families bigger than 4 - add $7,500 for each person
If your income falls into within the limits, you can file Chapter 7. But, if your salary is higher, your bankruptcy lawyer can use the means test to see if you still qualify for a Chapter 7 Bankruptcy. The means test, according to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, states that if your income exceeds the specified limits for your state, your attorney can use the test to determine if your debts are excessive. This test uses a special mathematical process which evaluates your financial information to determine your worthiness for bankruptcy. If your debts are high, you may still be able to file Chapter 7. If not, you may have to go with a Chapter 13 Bankruptcy. A Chapter 13 bankruptcy attorney can help you determine what property you can keep.
What You Need to Get Started for Bankruptcy, Chapter 7 in Louisiana
When you go to meet with your bankruptcy attorney, you’ll need to bring the following documents with you:
- A list of your debts. Whether they qualify for dismissal or not, you’ll need a list of all creditors. In some cases, you may also need past statements and other information.
- Your last six month’s worth or paystubs.
- Last year’s filed tax return (and your spouse’s return, as well)
Your bankruptcy attorney will then help you fill out the Chapter 7 petition, which needs to be filled out correctly. An improperly completed Chapter 7 petition will be dismissed immediately, and you’ll have to go through the process all over again.
The best part is that once you file for Chapter 7, by law your creditors can no longer contact you – they’ll have to deal directly with your bankruptcy attorney. Not only will you not have to dodge their calls and worry about having your wages or bank account garnished, but you’ll be able to relax knowing that your debts will soon be taken cleared away.
The Chapter 7 Bankruptcy Process
For those filing a Chapter 7 bankruptcy, once you have met with your attorney, you will be required to follow a specific process once you file for bankruptcy. While each case can vary, most will follow the process as outlined below:
- Meet with an attorney and discover if you qualify for bankruptcy.
- Create the bankruptcy petition and file it with the court (Your bankruptcy attorney should file it electronically).
- Take a debtor’s education course.
- Attend a short bankruptcy hearing.
- Take the final debtor’s education course.
- Wait for your discharge.
Your bankruptcy attorney will recommend a company where you can take your courses. These classes are not long averaging about 90 minutes, but they are required in order to successfully discharge yoru case.
Louisiana Property and Asset Exemptions
In every state, residents are allowed to keep a certain amount of property. Some states allow debtors to claim either state exemptions or federal exemptions, but Louisiana residents are confined to using only state exemption laws. Exemptions change from time to time so it’s important to check with your Louisiana bankruptcy attorney to see what exemptions apply to your Chapter 7 bankruptcy case.
Some exemptions include:
- House: You are allowed to claim up to $35,000 for a primary residence of up to 5 acres in city housing, or up to 200 acres outside of a city area.
- Other property:
- 100% of burial plots or cemetery spaces
- 100% tools, instruments, and machinery for a business
- $5,000 worth of wedding or engagement rings
- 100% of clothing, household furniture, and appliances
- $7,500 for one vehicle
- Benefits - 100% of the following:
- State employees benefits
- Teachers retirement benefits
- Orleans Parish school employees retirement benefits
- Louisiana State University retirement system benefit
- School employees retirement benefits
- Judicial retirement benefits
- Assessors' retirement fund benefits
- Court clerk's retirement benefits
- District Attorney's retirement benefits
- Public safety officers' death benefits
- Municipal employees’ retirement benefits
- Parochial employees’ retirement benefits
- Veterans Administration benefits
- Registrars of voters’ employees’ retirement benefits
- Miscellaneous exemptions:
- 100% Public assistance payments
- 100% Crime victims' compensation
- 100% Crop insurance proceeds
- 100% Wages of seamen while on a voyage
- 100% Proceeds of life insurance policies
Your Chapter 7 bankruptcy attorney will help you determine which of the exemptions will benefit you the most. Don’t let debt consume your life and ruin your time spent with family and friends. Contact a local bankruptcy lawyer today.
Louisiana Bankruptcy Courts
300 Jackson Street, Suite 116
Alexandria, Louisiana 71301
Phone: (318) 445-1890
United States Courthouse and Federal
707 Florida Street, Suite 119
Baton Rouge, Louisiana 70801
Phone: (225) 389-0211
Washington Life Building
214 Jefferson Street, Suite 100
Lafayette, Louisiana 50501-7050
Phone: (337) 262-6800
Hale Boggs Federal Building
United States Courthouse
500 Poydras Street, Suite B-601
New Orleans, Louisiana 70130
Phone: (504) 589-7858
United States Courthouse
300 Fannin Street, Suite 2201
Shreveport, Louisiana 71101
Phone: (318) 676-4267