When you face overwhelming amounts of debt, bankruptcy protection gives you some breathing room as you attempt to re-stabilize your financial situation. Before filling for bankruptcy, make sure you understand current Louisiana bankruptcy laws.

Bankruptcy Exemptions

Under Louisiana bankruptcy laws, the following assets are protected:

• Up to $25,000 for the property you live in
• Up to $7,500 for a vehicle
• Dishes, furniture, appliances, therapy equipment, linens and clothing, with the exception of any sterling silverware
• Family portraits
• Poultry, fowl, and a cow
• Pets
• Up to $5,000 for wedding rings
• One utility trailer
• Up to $500 for one firearm
• Military arms and equipment
• Musical instruments
• At least 75 percent of earned, unpaid wages
• Federal earned income tax credit
• Tools of the trade
• Up to $7,500 for a business vehicle
• Business utility trailer
• One business firearm, up to $500 in value
• Annuity contracts, tax-deferred arrangements and pensions
• Life insurance proceeds
• Cemetery property
• Group insurance policy or proceeds

Remember, when you file bankruptcy, it does not eliminate voluntary liens, like your car loan. If you want to keep assets that you still owe money on, you must reaffirm the debt with your lender and stay current on your payments.

Chapter 7 Bankruptcy Information

Chapter 7 bankruptcy is the form of bankruptcy that wipes out most debts after assets have been sold and money redistributed. Recent federal legislation requires debtors to pass a means test to file this form of bankruptcy. The means test requires that the debtor have an income at or below the median level for the state. If you pass the means test, the bankruptcy court’s trustee will sell your non-exempt assets, use them to pay your creditors, than release you from your remaining debts.

Chapter 13 Bankruptcy Information

If you do not qualify for Chapter 7 bankruptcy, have a strong desire to try to repay your debts, have several debts that do not qualify for bankruptcy or have assets you wish to keep, you may file Chapter 13 bankruptcy. Under this form of bankruptcy, the court helps you create a repayment plan. For the next three to five years, you will work that repayment plan under court supervision as you attempt to repay your debts.