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Lafayette Bankruptcy Law Blog

Small debt relief steps may not always help those struggling

Most people in Louisiana and elsewhere accumulate some amount of debt at one point or another. Some individuals may utilize a credit card or have a mortgage loan, and for the most part, they stay on top of their payments. For other parties, their outstanding balances may be much more consuming, and they may have a desire to find the right form of debt relief.

There are many ways that individuals can work toward reducing their debt on their own. They may find it helpful to organize their debt to determine what balances have the highest interest rates and work to pay those balances off first. They could also potentially benefit from having a certain amount set aside from their paychecks each month to go specifically toward their debt.

What determines eligibility for Chapter 7 bankruptcy?

Trying to handle financial troubles on one's own can be a scary situation. Of course, many Louisiana residents may think that the idea of going through Chapter 7 bankruptcy or another debt relief option is just as scary. However, with the right information and help, bankruptcy does not have to be a frightening experience to start or finish.

If a person is interested in filing for Chapter 7, there are certain qualifications that must be met. In particular, the individual must pass a means test. This test involves a review of financial history to rule out any possibility of bankruptcy fraud and to make sure that Chapter 7 suits the situation better than Chapter 13. It can also help determine whether the petitioner needs to go through bankruptcy at all.

Celebrity chef files for Chapter 11 bankruptcy due to hardships

In best case scenarios, businesses thrive, gain financial success and have loyal clients and customers. While many Louisiana company owners certainly want to end up in this type of scenario, that is not always the case. Some businesses may face financial struggles and other hardships that result in their needing to file for Chapter 11 bankruptcy for help with those difficulties.

It was recently reported that celebrity chef Mike Isabella has recently filed for this type of bankruptcy protection. According to reports, his company, which includes multiple restaurants in various locations, has seen financial struggles recently, especially after a sexual harassment lawsuit was filed against the company. The company is also facing lawsuits from landlords who presumably held the locations of some of his restaurants.

Which debts should you tackle first?

As you review your finances, you may come to find that you have many types of debt. Even if you have a plan in place for paying down your debt, you may have questions about which type to tackle first.

For example, if you have multiple credit cards and a personal loan, you need to decide which one to pay off first.

Chapter 13 may help those facing foreclosure

No Louisiana resident wants to wind up in a situation where the loss of a home is a real possibility. However, many people face foreclosure, and it can wreak havoc on the stability of their livelihood. They may also have to contend with a great deal of mental distress as they wonder what they can do to stop the proceedings against them. In many cases, Chapter 13 bankruptcy may be able to help.

With Chapter 13, a person needs to have a steady income that would allow him or her to repay debts over time with the help of a repayment plan. When it comes to foreclosure and bankruptcy, the filing of a bankruptcy petition enacts an automatic stay. This means that creditors must stop all collection actions against the person filing, which also means foreclosure proceedings must stop.

Peer pressure could lead to the need for bankruptcy

When many Louisiana residents think about the issues in life that concern them most, it would not be surprising for money and finances to be among those top concerns. They may even wonder whether bankruptcy may be a step to seriously consider. Of course, many people may think that this option will somehow signify bad financial judgment. However, numerous individuals struggle with their financial situations for various reasons.

Many people may not realize that peer pressure can result in financial hardships. Individuals may have their mind set on saving and budgeting, but their friends or family may pressure them into going out for dinner or taking a vacation. While it may seem fun at the time, these events can easily blow a person's budget to a point where finances are no longer on track.

Waiting too long to file bankruptcy may be debt relief mistake

Making the decision to file for bankruptcy is a considerable step to take. While this debt relief option can be immensely beneficial for those struggling financially, it can also be a complex process to complete. Therefore, Louisiana residents wanting to follow this path may want to watch out for common mistakes.

One mistake that many people fall victim to is waiting too long to file. They may think that putting off bankruptcy will give them the opportunity to address their financial issues on their own, but typically, individuals will not have a sudden event that allows them to immensely improve their financial situations without help. Additionally, waiting to file may only mean that collectors continue calling and that wages may still be garnished. Filing sooner may also provide the chance to work on improving credit more quickly.

Considerable debts may have companies considering Chapter 11

Running a business is a significant financial risk. Many Louisiana business owners feel ready and willing to take this risk in hopes of having a successful venture. Unfortunately, not every business operation proves successful, and a considerable amount of debt may be accrued. As a result, companies may need to file for Chapter 11 bankruptcy.

It was recently reported that the owners of a hotel-condominium project in another state filed a bankruptcy petition due to outstanding debts. Apparently, renovations on the project had been put on hold three years ago, and the goal of the bankruptcy filing is to remove liens and other legal issues against the hotel project in order to sell the building. The proceeds from that sale would then go toward repaying creditors.

What kinds of property can you keep during bankruptcy?

Many myths surrounding bankruptcy can make people who need the protection think twice about filing their case. One of the areas that seems to be the source of a lot of untruths or misunderstandings is what type of property you can keep when you go through bankruptcy.

Anyone who is thinking of filing for bankruptcy should find out how it might impact their assets. This can be the key factor that helps them decide if they are going to move forward with the case.

Sudden financial hardships may lead to bankruptcy need

Sudden financial hardships can happen to anyone. Some Louisiana residents may find themselves struggling due to job loss, divorce, medical emergencies or other issues that cause their finances to take a hard hit. These predicaments can often also lead to an increase in credit card use and the accumulations of other debts, which may lead to a need for bankruptcy.

In order to determine the best course of action, parties may first want to assess their situations. For instance, they may want to see on what the majority of their spending takes place and where they may be able to reduce costs. Considering a budget and sticking to that budget could also help parties have a better idea of their income and spending habits.

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Richoux Law Firm, L.L.C.
110 E. Kaliste Saloom Road
Suite 205
Lafayette, LA 70508

Toll Free: 888-327-5740
Phone: 337-205-7049
Fax: 337-456-6299
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