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.
There are numerous reasons Louisiana residents might be in debt. Common causes of debt are significant medical bills, overspending, or even divorce. Luckily, there are several options for dealing with these financial problems. One possible option to take care of overwhelming debt is to file for Chapter 13 bankruptcy. This type of bankruptcy allows individuals to reorganize their debt so that they have an easier way to repay it.
For some Louisiana consumers, getting back on their feet after financial difficulties can take a long time. While the support and guidance of an experienced attorney can be invaluable when a person files for Chapter 13 bankruptcy, it can be just as valuable in the three to five years it takes to complete the process. Many issues can arise during that time, one of which is the need for a new vehicle.
In Louisiana and other states, some people are said to never leave their homes without their credit cards. According to the Federal Reserve, credit cards are used to make more than half of all purchases nationwide. However, if managed properly, a credit card can be a consumer's friend; if not, it can be an enemy that may bankruptcy protection to alleviate.
Louisiana residents who are facing financial hardship may be looking at ways to achieve debt relief. Many people avoid bankruptcy because they fear losing everything and being left destitute. However, the intention of the U.S. Bankruptcy Code is to provide victims of unanticipated and costly emergencies with opportunities to re-establish financial stability and have a fresh start.
Committing to continuing payments over a three to five year period without any defaults whatsoever is an enormous challenge. This is the commitment Louisiana consumers make when they file for Chapter 13 bankruptcy. However, circumstances can change significantly during that time -- job loss, medical emergencies and other problems can jeopardize a consumer's chances of maintaining payments. This can lead to the court dismissing the case, subjecting the consumer to creditor harassment and potential foreclosure all over again.
Louisiana parents may find it difficult to refuse a request to co-sign a loan -- particularly if it is for a child who is just starting out and trying to build a credit history. However, this merits careful consideration. Learning about the risks and gaining an understanding of the remedies, including bankruptcy protection in some circumstances, is likely prudent.
The Federal Reserve says credit card debt was second on the list of consumer debts in 2014. Financial advisors also say that a significant number of consumer bankruptcy filings involve overwhelming credit card debt nationwide, including in Louisiana. They say the reason for this is consumers forgetting to manage their credit card use. Reportedly, most users are not as careful when using their credit card as they are when spending cash. Very often, this results in the consumer becoming overwhelmed by debt.
Many families nationwide, including in Louisiana, have high levels of credit card debt. Some land in a spiral of debt that can become overwhelming, but many consumers will avoid filing for bankruptcy at all costs. If credit card debt payments go unpaid for three months, the lenders will likely hand the debt over to a collection agency. The debt collectors may expose the consumer to all kinds of harassment.
Previously, we began looking at the issue of discharging tax debts in bankruptcy. As we noted, it is possible to discharge tax debts, but certain requirements must be met and not all types of tax debt will qualify for discharge. We’ve already spoken briefly about the rules that apply to tax debt discharge.