Louisiana residents facing significant financial problems have multiple alternatives for dealing with their debt. Filing for bankruptcy is one option they may wish to pursue. The two most common types are Chapter 7 and Chapter 13. For individuals or couples with a regular income, Chapter 13 may be the best solution. This type of proceeding allows filers to propose a payment plan over a period of time to repay their debts while keeping their assets intact.
While there are several different forms of bankruptcy, not everyone qualifies for each type. Chapter 7 bankruptcy requires the regular income of those filing to be under a certain limit. The county in which the filer lives determines the income limit. Individuals or families with higher incomes will likely better benefit from filing for Chapter 13.
Though Chapter 7 can fully wipe out debts, those who choose this type may also lose their assets, though state-mandated exemptions may provide for the retention of some. In a Chapter 13 filing, assets with equity are not lost after filing. For example, if a family owns a house or other property and files for Chapter 13, they will be able to retain the interest in their home or property while they repay the debt over time.
Because bankruptcy law can be complicated, those who are considering filing can work with an experienced Louisiana bankruptcy attorney to better understand their options. An attorney can evaluate each situation and determine whether filing for Chapter 13 is the best solution. Additionally, a lawyer can help clients by offering support and guidance throughout the entire process.
Source: nj,com, “Preparing for personal bankruptcy“, Karin Price Mueller, March 7, 2017