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.
To get around the Lafayette area, you likely depend on your vehicle to get to work and drive children to their events. If you fall behind on a car payment or two, you may start getting threatening phone calls from your lender. Are you starting to feel like there's no way to avoid the repossession?
In any bankruptcy case, one of the major benefits of the process is obtaining discharge of debts. In Chapter 13 bankruptcy, discharge is ordinarily dependent on the debtor successfully completing his or her repayment plan.
Previously, we looked at a recent bankruptcy case in which the court determined that a debtor’s personal injury settlement, which was obtained while his Chapter 13 repayment plan was still ongoing, was part of the bankruptcy estate and could therefore be worked into the debtor’s repayment plan. The court, in making the ruling, adopted a growing majority approach to determining whether property acquired by a Chapter 13 debtor after confirmation of a repayment plan is part of the bankruptcy estate.
When Louisiana consumers face unmanageable debts, they will likely explore the options available to remedy the situation. While there are various methods to obtain debt relief, most of them are time-consuming and offer no protection against creditor harassment during that time. Personal bankruptcy is a solution that offers debt relief and freedom from creditor action. Although filing for bankruptcy will have a severe impact on the filer's credit score, so will months and months of struggling to get relief while debts get further behind.