May 24, 2016
Bankruptcy is a system of federal law, so the process to file for Chapter 7 bankruptcy or to file for Chapter 13 bankruptcy is nearly identical in every state, including Louisiana. However, Louisiana law plays an important role, especially in setting property exemptions, which determine what property you get to keep (if you file for Chapter 7) and how much you have to repay your creditors (if you file for Chapter 13). There are also important state-specific resources available to you.
Before you file for Chapter 7 or Chapter 13 bankruptcy in Louisiana, you will have to get credit counseling from an agency approved by the United States Trustee’s Office. Here’s a list of agencies that have been approved to provide this counseling in Louisiana.
Louisiana has three federal bankruptcy districts. You can find information, forms, local rules, and more at each bankruptcy district’s website.
Like every other state, Louisiana has its own set of property exemptions. (To learn more about how property exemptions work generally and which exemptions you may use, see Bankruptcy Exemptions: What Do I Keep When I File for Bankruptcy?)
Some states allow bankruptcy filers to choose between the state’s exemptions and a federal exemption list, but Louisiana isn’t one of them.
In Louisiana, filers may exempt up to $25,000 in home equity, $7,500 of equity in a vehicle, and engagement and wedding rings with a value up to $5,000. Here is a detailed list of Louisiana exemptions.
When you file for bankruptcy, you must compare your income to the median income for a household of your size in Louisiana. If your income is less than the state median, you will be eligible to file for Chapter 7 and, if you choose to file for Chapter 13, you can use a three-year repayment plan (rather than five years).
Currently, the median income for a one-person Louisiana household is around $42,000; these figures change frequently. You can find the most recent amounts on the website of the U.S. Trustee at www.justice.gov/ust. Click on “Means Testing Information.”
After you file for bankruptcy but before you receive your discharge, you must take a debtor education course. Like the mandatory credit counseling you must take before filing your forms, you must receive debtor education from an agency approved by the U.S. Trustee’s Office. Here is a list of agencies that are currently approved to provide this counseling in Louisiana.
If you're considering bankruptcy, you may want to talk to an experienced Louisiana bankruptcy lawyer.