Louisiana has the fourth highest rate of Chapter 13 bankruptcy in the United States.
The federal government oversees the bankruptcy process. There are some state-specific laws you should be aware of if you're a Louisiana resident.
Read on to find out three important things to know about filing Chapter 13 bankruptcy in Louisiana.
1. What is the Difference Between a Chapter 7 and a Chapter 13 Bankruptcy in Louisiana?
You have two options for filing for bankruptcy in Louisiana. You can file for Chapter 7 bankruptcy or Chapter 13 bankruptcy.
A Chapter 7 bankruptcy eliminates the majority of your debt. You must meet the Louisiana income requirements to file for Chapter 7.
A Chapter 13 bankruptcy sets up a repayment plan. If you file for Chapter 13 bankruptcy, you will have a three- to five-year repayment plan. About 41 percent of the people who file for Chapter 13 have their debts discharged, or eliminated.
If you file for a Chapter 13 bankruptcy, in most cases you can keep your property. For example, if you have a mortgage that you've fallen behind on paying, a Chapter 13 bankruptcy will allow you to get caught up. If you make your payments, you can keep your home and reinstate your mortgage agreement.
2. Who Can File for Chapter 13 Bankruptcy in Louisiana?
You can only file for a Chapter 13 Louisiana bankruptcy as an individual. You can't file as a business unless you are a sole proprietor. Sole proprietors are individual business owners, so they can file for a Chapter 13 bankruptcy.
You will have to provide the court with information on your monthly income. You can't have more than $1,184,200 in secured debt or $394,725 in unsecured debt. Secured debt is debt that is attached to collateral.
For example, if you own your home, it is considered secured debt. This is because if you don't pay, your home can be seized by your lender and sold to pay the balance of your mortgage.
A Chapter 13 bankruptcy allows you to get caught up on your payments.
3. How Do You File for Chapter 13 Louisiana Bankruptcy?
If you're planning to file for Chapter 13 in Louisiana, you are required to go to credit counseling. The counseling must take place within six months of the date you file for bankruptcy.
You will need to gather your financial paperwork, including pay stubs, your most recent tax returns, and the titles for any property you own. You also need to propose a repayment plan for your creditors.
Once you have the paperwork, you or your attorney will file the appropriate forms with the closest Louisiana bankruptcy court. There are three bankruptcy courts in Louisiana. There is a $281 fee for filing a Louisiana Chapter 13 bankruptcy.
Let Us Help
If you're thinking of filing for bankruptcy in Louisiana, it's important to consult an attorney. A Chapter 13 bankruptcy is more complicated than a Chapter 7. There are more forms to complete. Although you can file on your own, an attorney can ensure your Chapter 13 repayment plan will meet the expectations of the court and your creditors.
Contact us today to find out if a Chapter 13 bankruptcy is the right solution for you.