Louisiana Bankruptcy Bankruptcy is not for everyone or every situation. Bankruptcy
can be of great help for some but can cause great losses for others.
Since some loans require that a house be used for collateral, Chapter
Seven bankruptcy can result in the loss of that home.
So how does this work? The state of Louisiana allows certain exemptions
when filing for Chapter Seven bankruptcy and can include a home
exemption. But if a home equity is more than is allowed to be protected
by a Louisiana home exemption, the home can possibly be lost. In this
circumstance Chapter Thirteen bankruptcy is usually the best choice as
a payment plan can be created to make the necessary payments.
Chapter Seven Bankruptcy Louisiana has two different kinds of bankruptcy: Chapter Seven
and Chapter Thirteen. Chapter Seven bankruptcy is a restart to an
individual's credit and clears a majority of credit problems. Under
this kind of bankruptcy, a trustee will collect the necessary assets
and will sell all the property that has been deemed not exempt.
Once the assets have been sold, the money will be used to pay the
pending debts. The trustee will also take a commission from the valued
assets for distributing the property.
Under Chapter Seven bankruptcy certain kinds of debt cannot be
eliminated, including child support, alimony, certain taxes, fraudulent
debts, certain charged items, and student loans. The kinds of debts
that are filed under Chapter Seven bankruptcy include those for
unsecured bills and credit card debts. Chapter Seven bankruptcy can be
filed by an sole individual or through a husband and wife together.
Exempt Property Certain types of property can be exempt from being sold and be
protected from creditors when Louisiana bankruptcy is filed. Louisiana
has set up different categories for these exemptions and how much their
values are. However even as some debts can be erased through
bankruptcy, not all debts can be eliminated. These are called
Exemption limitations apply towards any equity of property that an
individual may have. Equities may be exempt if the property has been
secured through a loan and all payments are currently being paid in a
timely manner. The property, such as a house or a car, may be kept if
payments have been elected for continued payment. In order to keep
non-exempt an individual will need to repay the property's value.
Chapter Thirteen Bankruptcy Chapter Thirteen bankruptcy allows individuals the opportunity
to become debt-free between three and five years. Rather than sell
property to pay off creditors like in Chapter Seven bankruptcy, a
payment plan is proposed for a specified time limit. Minimum payments
will be designated for each month so that the debt can be eliminated in
less than five years.
Chapter Thirteen bankruptcy can help individuals repay missed mortgage
or car payments, keep their homes by avoiding foreclosure, pay taxes,
keep non-exempt properties, and halt interest debt. The amount that is
paid each month depends on the overall income and specific factors of