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Lafayette Bankruptcy Law Blog

Chapter 7 bankruptcy has its upsides

Someone considering filing for bankruptcy may feel hesitant to move forward with this action. Many people tend to focus on the negative aspects of Chapter 7 bankruptcy, and they may think that this debt relief option may do more harm than good. Fortunately for individuals in Louisiana and elsewhere, there are many benefits to this option.

First of all, a successful Chapter 7 bankruptcy case could allow parties to discharge debts in a matter of months. The process typically takes approximately three to six months for qualifying parties to complete. This length of time may be more favorable for obtaining debt relief than the damage that could take place during that same length if debt continues to accumulate.

There is more than one cause of credit card debt

Even if you have poor credit, there's still a good chance you'll qualify for a credit card. Subsequently, you put yourself in position to do one of two things:

  • Use the credit card to improve your credit standing and score
  • Abuse the credit card, which can lead to a variety of financial problems in the future

It's important to understand that there is more than one cause of credit card debt. If you know why and how this happens, you have a better chance of preventing trouble. Here are some of the most common causes:

  • Unemployment. If you suddenly lose your job you may find it difficult to pay off your credit card debt. As a result, interest charges add up and your situation slowly begins to spiral out of control. Underemployment, such as when you're not paid as much as you deserve, is also a problem.
  • Divorce. Everything is going well in your marriage, and then out of the blue, something happens and divorce is staring you right in the face. As your financial situation changes, you could find yourself relying on credit cards to make ends meet.
  • Poor money management. Simply put, if you don't manage your money appropriately, you're going to find yourself in trouble at some point. The best way to protect against this is to create (and follow) a budget that outlines both your income and expenses.
  • Making the minimum payment. The nice thing about a credit card is that you only have to make the minimum payment every month. The bad thing about this is that it results in monthly finance charges, which ensure that it will take you longer to eliminate your balance in full.

Confirmation of repayment plan necessary in Chapter 13 bankruptcy

Deciding to take a head-on approach toward addressing debt issues is a major step. It can feel confusing and overwhelming when Louisiana residents decide to file for Chapter 13 bankruptcy, but if successful, their cases could help them achieve financial stability once again. Of course, there are many aspects of the process that individuals may not understand.

With Chapter 13, petitioners will have to create a plan for repaying their creditors over time. Because not just any plan is acceptable, the court must confirm that the proposal would work for the particular situation. This part of the process is known as confirmation. Parties will have time to prepare their plan proposals, and these plans will be presented to the court during a hearing specifically for confirmation.

Could tax debt be discharged in Chapter 7 bankruptcy?

When Louisiana residents suffer from considerable debt, they may fear that they will be saddled with this burden forever. Though they may seriously consider Chapter 7 bankruptcy as a way to deal with their liabilities, they may already know that some debts may not be discharged through this process. As a result, they may wonder if they should even more forward with the necessary legal proceedings.

In particular, some parties may have concerns over tax debt. In general, this type of debt is not eligible for discharge through bankruptcy. However, if the debt meets certain stipulations, it could potentially have a chance of forgiveness in Chapter 7. There are five requirements that, if met, could help tax debt become dischargeable.

More shoe stores are filing for Chapter 11 bankruptcy

Running a business tends to have its difficulties. Even when companies reach a certain level of success, owners still understand that there are risks around every corner. Unfortunately for some, financial issues could quickly arise that leave Louisiana businesses and those elsewhere struggling. As a result, they need debt assistance available through a Chapter 11 bankruptcy.

It appears that, more recently, shoe companies are facing such hardships. Reports stated that Rockport Group became another shoe company to recently file for liability protection through Chapter 11 bankruptcy. The company reportedly feels that certain business moves, such as separating from previous owner Adidas in 2015, contributed to its struggles as the 'divorce' was an expensive and complex endeavor. Of course, the rise of online shopping is also a major contributor as fewer people are visiting physical stores to purchase items.

Chapter 7 bankruptcy may suit those with no or low income

For a considerable amount of time, many Louisiana residents may feel that they have solid control over their finances. They may think that they will never end up in a situation where their debt becomes too overwhelming, but a sudden event, such as job loss, could easily and quickly lead to substantial debt accumulation. As a result, some parties may end up considering bankruptcy.

After losing a job and amassing immense debt, Chapter 7 bankruptcy may be worth considering. This is the most popular type of consumer debt relief, and it is often beneficial to individuals who lack an income or have too little income to address their debts. Unlike Chapter 13, which utilizes a repayment plan, Chapter 7 involves the liquidation of assets. Liquidation means that nonexempt property will be sold in order to pay debts.

Exploring bankruptcy as debt relief option may be wise

Having a substantial amount of debt is an issue that numerous Americans face, including many in Louisiana. The manner in which the debt was accrued can differ from case to case, and because of the individual nature of each case, the debt relief avenue that works best can vary from person to person. However, for parties facing overwhelming liabilities, considering bankruptcy may be worthwhile.

Consumer bankruptcy can have many benefits, but it may not suit every situation. For instance, bankruptcy will not always cover every type of debt a person has. In particular, child support, tax debt, alimony and student loans are generally not forgiven during the process. However, if individuals can present evidence that their student loans present an undue hardship, they could potentially be discharged.

There are many ways to stop foreclosure

You love your home and you will do whatever you can to stay put, even if you're having trouble making your mortgage payments.

Unfortunately, your strong feelings alone are not enough to ward off your mortgage lender. If you're facing foreclosure, it's imperative to learn more about the many steps you can take to protect your home.

Bankruptcy as debt relief: How does it affect auto loan interest?

Because there are many misconceptions regarding bankruptcy, it is common for people to discount this option when considering how to handle their outstanding debt. In particular, some Louisiana residents may mistakenly believe that they will never be able to get a loan after filing for bankruptcy. Fortunately, that is not the case, and while this method of debt relief can affect credit, it does not have to remain permanent.

Because loans and interest rates are a concern for individuals considering bankruptcy, it may help them to take a closer look at the differences in how much borrowers pay on loans before and after bankruptcy. One loan company conducted a study that indicated bankruptcy filers tend to pay over $2,000 more on a $15,000 auto loan when applying for the loan within a year of completing bankruptcy. Of course, anyone with a low credit score tends to face higher interest rates.

Is Chapter 7 worth considering over debt settlement?

Financial struggles can bring about a great deal of hardship for anyone. Louisiana residents who have accumulated considerable credit card debt may worry about paying their bills, dealing with possible embarrassment relating to their situations and other stressful aspects of money issues. Fortunately, debt relief methods, particularly Chapter 7 bankruptcy, may be able to help.

Before filing for bankruptcy, some individuals may want to consider other options. For instance, many parties may think that debt settlement plans are a better way to address outstanding liabilities. However, reports indicate that many individuals typically pay between 65 percent and 80 percent of the original amount owed. This percentage does include the fees that most debt settlement companies charge for services.


Richoux Law Firm, L.L.C.
110 E. Kaliste Saloom Road
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Lafayette, LA 70508

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