Qualifying For Bankruptcy In Louisiana
The Cook Law Firm, APLC, helps Louisiana residents understand and navigate the bankruptcy process. Our family-run firm brings 125 years of combined legal experience to your case. We’ll guide you step by step and help you decide if bankruptcy is the right choice for your financial situation.
If you’re facing creditor harassment or relentless collection calls, wage garnishment, or other debt-related issues, bankruptcy provides legal protections while you get your financial affairs in order. Let us assist you in getting a fresh start.
Types Of Bankruptcy And Eligibility Requirements
When considering bankruptcy, it’s important to understand the qualifications. There are two main types of bankruptcy available to individuals: Chapter 7 and Chapter 13. Businesses can also file for Chapter 7; some small businesses may be eligible for Chapter 13. Each has its own set of requirements.
Qualifying For Chapter 7
Chapter 7, often called “liquidation bankruptcy,” is available to both individuals and businesses. To qualify for Chapter 7 bankruptcy in Louisiana, you typically need to:
- Pass the means test (if your income is below the state median)
- Complete credit counseling from an approved provider
- Not have had a Chapter 7 bankruptcy discharge in the last eight years
Even if you meet these criteria, the court may still dismiss your case if it appears you filed in bad faith or if granting relief would be an abuse of the bankruptcy system.
Qualifying For Chapter 13
Chapter 13, also known as a “wage earner’s plan,” is primarily for individuals with regular income, including sole proprietors. As of 2024, to be eligible for Chapter 13 bankruptcy in Louisiana, you must:
- Have a regular income
- Have unsecured debts of less than $465,275
- Have secured debts less than $1,395,875
- Be current on tax filings
- Complete credit counseling from an approved provider
- Not have had a Chapter 7 bankruptcy discharge in the last four years
- Not have had a Chapter 13 bankruptcy discharge in the last two years
- Not have had a bankruptcy case dismissed in the last 180 days for specific reasons
Note: The debt limits refer to definite debts that are not subject to dispute. If you’re unsure about how your debts are classified, our attorneys can help you understand your situation.
Chapter 13 can be particularly useful if you’re above the median income or have assets you want to protect. It may also help with certain debts not dischargeable in Chapter 7. Consult with our experienced bankruptcy attorneys to determine your eligibility and explore options for your financial situation.
Understanding The Means Test
The means test is a crucial part of the bankruptcy process. Bankruptcy courts use this to determine eligibility for Chapter 7 bankruptcy and to set up payment plans for Chapter 13 bankruptcy. Here’s how it works:
- Calculating your income: We calculate your current monthly income (CMI) by averaging your income over the past six months.
- Comparing to state median: We compare your CMI to the Louisiana median income for a household of your size.
- For Chapter 7 bankruptcy: If your CMI is below the state median, you generally qualify for Chapter 7. If your CMI is above the median, we must complete additional calculations, deducting allowed expenses from your income. If these calculations show you have enough disposable income to repay some debts, you may not qualify for Chapter 7 and might need to consider Chapter 13 instead.
For Chapter 13 bankruptcy, your CMI helps determine the length of your repayment plan and how much you must pay to unsecured creditors. We can help you navigate these qualifications and determine which type of bankruptcy, if any, is right for your situation.
A Closer Look At Schedule I And Schedule J Bankruptcy Petitions
While the means test looks at your past income, Schedule I and Schedule J bankruptcy petitions provide a snapshot of your current financial situation:
- Schedule I (Income): This form details your current income from all sources.
- Schedule J (Expenses): This form outlines your current monthly expenses.
These schedules are essential because:
- They reflect your projected financial situation throughout your bankruptcy term.
- They can impact your monthly bankruptcy payments in a Chapter 13 case.
- Changes in your income or expenses after filing can potentially modify your bankruptcy plan.
For example:
- A decrease in income might allow you to pay less to unsecured creditors.
- An increase in income could lead to higher monthly bankruptcy payments.
Unlike the means test, which uses data from the past six months, Schedules I and J focus on your present and projected financial situation. This can be particularly important if your circumstances have changed recently or are expected to change during your bankruptcy.
At The Cook Law Firm, APLC, we can help you understand how these schedules might affect your bankruptcy case and guide you through the process of accurately completing them.
Let Us Find The Answer For You
You don’t need to navigate the complexities of bankruptcy law on your own to determine if you qualify. You can turn to us and we will take care of the rest. Call our Haughton office at 318-703-5851 or email us today to schedule a free consultation with your local bankruptcy lawyers. We proudly serve clients throughout Haughton, Shreveport and the surrounding areas of Louisiana.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.