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Lafayette Bankruptcy Law Blog

Debt relief methods can have their pros and cons

Many people struggle with keeping debt under control. Some debt can have its uses, such as car loans or mortgages, but even those can become a burden if individuals accrue substantial amounts of other debts or face significant financial setbacks. In many cases, individuals in Louisiana and elsewhere find themselves in need of debt relief assistance to get their affairs back on track.

Because each person and each situation is different, the solution to one's debt issues is not the same for everyone. Fortunately, there are different types of relief methods that could suit various circumstances. Of course, options like debt settlement and debt consolidation are not always the be everything many individuals hope them to be. Some companies could claim to help but end up only being a scam, or creditors may not work with such companies because they have no obligation to do so.

Chapter 11 bankruptcy may be in the future for Forever 21

With online shopping offering so much ease and convenience, more and more physical retail stores in Louisiana and elsewhere find themselves struggling. In fact, numerous stores have closed in recent years due to being unable to recover. Recent reports indicate that yet another retail chain is possibly looking to file Chapter 11 bankruptcy is efforts to address its current struggles.

According to reports, women's clothing retailer Forever 21 is considering filing for Chapter 11 bankruptcy protection. The company has 815 stores across the country, and it is possible that at least a portion of those stores will close in the event of a bankruptcy filing. It is common for store closings to take place when companies file for this protection as they work to make their business smaller and more manageable.

Is filing for bankruptcy more than once an option?

Any Louisiana resident could be hit with financial problems at any time. Even if individuals are able to get back on track after an initial bout with such difficulties, it is not uncommon for these problems to come back again. As a result, some parties may consider filing for bankruptcy a second or subsequent time.

Some people may be considering filing for Chapter 7 bankruptcy after having already gone through the bankruptcy process at least once. However, there are restrictions regarding how soon a person could file another petition. For example, if a person filed for Chapter 13 bankruptcy and is working to pay off those associated debts, he or she would need to wait at least six years before filing for Chapter 7.

These benefits of Chapter 7 bankruptcy will pique your interest

With so many benefits, many people turn to Chapter 7 bankruptcy if their financial situation takes a turn for the worst. While it's not the right solution to every money-related problem, it may be something you want to strongly consider.

Before you decide in favor of Chapter 7 bankruptcy, it's critical to understand the benefits. Here are four of the best:

  • A fresh start: Once your Chapter 7 bankruptcy case is in the past, you'll feel like a new man or woman. A fresh start allows you to make better financial decisions the second time around, thus putting you in position to reach all of your goals.
  • No repayment plan: While there are times when Chapter 13 bankruptcy makes sense, this calls for a repayment plan. This results in most of your disposable income being sent to creditors. Chapter 7 bankruptcy does not have a repayment plan component, thus allowing you to keep the money you earn.
  • It's a fast process: As long as you prepare accordingly and follow the steps outlined by the court, a Chapter 7 bankruptcy case typically concludes within six months of filing. Even better is the fact that the court will issue a discharge order within two to three months.
  • No debt limitation: One of the primary concerns of Chapter 13 bankruptcy is the limitation on the amount of debt you can have. With Chapter 7 bankruptcy, there are no rules that impose a limit on how much debt you can have to file.

Debt relief could start with putting an end to creditor calls

Accumulating a considerable amount of debt is stressful for many reasons. Some Louisiana residents may worry that they will not be able to afford their basic needs, and on top of that, creditors may be calling in attempts to collect the unpaid balances. While many people hope to ignore creditor calls for as long as possible, knowing their rights may help them handle the situation as they search for debt relief.

It is easy to feel confused about debt and who is owed what. Fortunately, consumers have the right to a written notice detailing what is owed, or proof of debt. Consumers can request this notice to gain information about the amount of debt, the creditor trying to collect, information about when the debt will be considered valid without dispute and other details. Essentially, this notice allows consumers to ensure that the debt is valid.

Bankruptcy can be a viable debt relief option for many

Most Louisiana residents do not picture themselves in situations where they are overwhelmed due to financial issues. In fact, it is typically the hope that individuals will be financially stable. Of course, financial stability does not come to everyone, and debt relief is often needed by many.

One of the most common forms of debt relief is bankruptcy. This method can help qualifying individuals or companies address substantial debt that may be holding them back in various ways. When parties begin considering bankruptcy as a way to handle their financial issues, they are already taking a step in the right direction by taking responsibility for their problems and seeking a solution.

Misusing credit cards could present need for debt relief

Many people utilize credit cards for various reasons. Numerous Louisiana residents may have a card for emergencies, to use for specific purchases to earn points or to use in efforts to build their credit. Unfortunately for some, credit card use can get out of hand and leave them needing debt relief.

Not everyone may immediately recognize when credit card use has gotten out of hand or when using a card may not be in his or her best interests. For instance, if individuals already have a considerable amount of debt to address, whether from credit cards or other financial obligations, it may not be wise to accrue more debt due to additional credit card use. In some cases, it could be unavoidable due to other financial struggles, but continuing to use credit cards could make matters more difficult.

Chapter 11 filing comes after refinery fire

Companies could face financial setbacks for any number of reasons. While many businesses are able to bounce back from a setback, others are not so fortunate. As a result, they may file for Chapter 11 bankruptcy assistance in efforts to keep their companies operational. Unfortunately, additional issues could lead to filing for bankruptcy again.

Louisiana readers may be interested in an oil refinery that filed for Chapter 11 bankruptcy for the second time in less than two years. According to reports, this second filing came after an explosion at the refinery resulted in the facility having to close. Significant property damage resulted from the explosion and fire, which made it more difficult to liquidate assets. The report stated that the initial plan was to sell the refinery, but the company filed bankruptcy instead.

Considering bankruptcy when credit scores are a concern

The best decision for a given situation is not always obvious. In many cases, there are pros and cons that come along with each option that make it difficult to know what course of action would offer more help than harm. For some Louisiana residents, choosing to file for bankruptcy is one of these tough decisions because they worry about the harm that could come to their credit.

It is important to remember that when it comes to credit scores and bankruptcy, it is likely that a person considering bankruptcy does not have the best score to begin with. It is common for financial situations to have become so dire that individuals miss bill payments, which lowers credit scores, and default on loans, which also lowers credit scores. As a result, bankruptcy may not do as much harm as some think.

Paying the minimum is a long road to escaping credit card debt

Credit card debt has a way of quickly adding up. If you don't like what you see when you review your credit card statements, it's critical to take the necessary steps in finding relief.

In a perfect world, you'd have enough cash on hand to eliminate your credit card debt. This gives you the fresh start you've been seeking.


Richoux Law Firm, L.L.C.
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