Lafayette Bankruptcy Law Blog

Many Louisiana residents may feel embarrassed when they face financial problems. Unfortunately, numerous people find themselves in this type of predicament due to circumstances they cannot control. As a result, it is not unusual for bankruptcy to be an option they take advantage of in hopes of getting their financial affairs back on track.

For instance, it is possible for a single parent to have a child with special needs and not have the ability to find stable employment as a result. Other individuals may face sudden job loss because their higher-paying positions are being replaced by individuals who work for a lower hourly wage. Others still may have sick loved ones that they must take care of or find themselves struggling due to multiple incidents that occurred over time, like accruing medical bills, changes in their insurance or car accidents.

One of the most common concerns that come up when a person considers bankruptcy is whether or not they can keep their home while discharging their debts. Often, individuals considering bankruptcy believe that they must sacrifice all of their possessions in order to discharge debts, but this is rarely the case.

Bankruptcy's purpose under the law is to give borrowers an opportunity to wipe the slate clean and make a fresh financial start. In order to "balance the scales" in the eyes of the law, discharging debt requires borrowers to accept some restrictions against further borrowing for a period of time, and may require forfeiting property, depending on the type of bankruptcy filed.

Having financial difficulties is one of the more challenging aspects of life to handle. To those who have considerable debt, it may seem as if their money problems are holding them back from everything in life. Though bankruptcy could be a debt relief option to consider, some Louisiana residents may worry that it could wipe out funds in their retirement accounts and create greater turmoil.

Fortunately, federal laws provide protections for retirement accounts during bankruptcy. Though employer-provided retirement accounts have had these protections for some time, the Bankruptcy Abuse Prevention and Consumer Protection Act added protections for IRAs in 2005, among other changes. Before federal protections for IRAs were in place, it was up to state law to determine how this type of retirement account was addressed during bankruptcy.

Deciding to take a major step to address outstanding debt is an important event. Many Louisiana residents struggle financially before choosing to move forward with Chapter 13 bankruptcy in efforts to get their affairs in order. While understanding this type of procedure can be difficult, one aspect that individuals may want to familiarize themselves with is the bankruptcy trustee.

In bankruptcy, the trustee plays an important role by overseeing a person's case. In a Chapter 13 filing, the trustee will ensure that the creditors receive their payments as indicated in the repayment plan. The petitioner will provide payments to the trustee, and the trustee will then administer those payments to the specified creditors. The trustee can also decide whether a creditor has a valid claim against the petitioner.