A Louisiana resident may find him or herself in debt for any number of reasons. Some people might struggle with paying medical bills, whether from an ongoing condition or from an unexpected emergency. Others may have lost their primary source of income or have problems with overspending, leading to significant credit card debt. Though there are likely various ways to take care of these financial issues, one approach is to file for bankruptcy.
Two forms of bankruptcy, Chapter 7 and Chapter 13, are the most common forms for individuals to file. Under the first, all nonexempt assets are liquidated and a person’s debts are wiped out. With Chapter 13, a payment plan is created by the court that allows individuals to repay their debts over a set period. These periods typically last from three to five years.
Though Chapter 7 may sound like the best and easiest option, those with multiple assets may want to think twice. By choosing Chapter 13, a person’s assets are kept intact. This form is often useful for those who own property or other interests. Chapter 7 may also have a negative impact on a person’s credit score for roughly seven to 10 years.
While bankruptcies can be helpful tools to address significant debts, the proceedings can be complex. This is why consulting an experienced Louisiana bankruptcy lawyer is often beneficial. An attorney can provide more information to an individual to help determine whether Chapter 13 bankruptcy is the best option for the particular situation. Additionally, an attorney can also provide assistance in all the related legal proceedings.
Source: mpnnow.com, “John Ninfo: The basics of a consumer bankruptcy“, John Ninfo, Aug. 29, 2017