Louisiana Bankruptcy Laws
Louisiana residents may stop the efforts of creditors in collecting their debts by filing petitions in court. The state of Louisiana has the ability to aid their residents by protecting their assets from debt collectors by following federal and state bankruptcy laws in regards to bankruptcy. The laws are designed to protect the debtor when they are unable to meet their payments, but only if the debtor passes the means test. The means test is a comparison of a family’s income against the median Louisiana state income of similar families and usually the main test to pass when applying for a bankruptcy petition.
Louisiana Bankruptcy Exemptions:
The state of Louisiana allows for the debtor to claim a number of exemptions such as homestead, motor vehicle, a utility trailer, personal possessions, pets, livestock, wages, engagement rings, insurance alimony, public benefits, therapeutic equipment, insurance benefits and education trust funds among other miscellaneous properties. The value of the exemptions is however restricted to a certain value whereas in other aspects the value is unlimited.
Louisiana Chapter 7 Bankruptcy Laws:
If the debtor makes a successful bankruptcy petition, then a way to pay off the debts must be established. Most people prefer using the direct bankruptcy option since it is much simpler; this is covered by chapter 7 bankruptcy laws in the 11th title of the United States code. Louisiana residents entrust their non exempt assets to trustees who try and settle the debts by selling the debtors properties. If one fails to meet the qualifications for chapter 7, the other common option is chapter 13.
Louisiana Chapter 13 Bankruptcy Laws:
Chapter13 bankruptcy laws allow for the residents of Louisiana to clear their credits in a period of 4 to 5 years under a payment plan. There are advantages and disadvantages of each of the processes such as that the chapter 13 option allows for the debtor to maintain ownership of their property, but just as chapter 7 the debtor has to qualify for the option.
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