Get on the Path to Financial Freedom with Chapter 13 Bankruptcy
If you’re struggling with overwhelming debt in Monroe, LA, and wondering who can declare Chapter 13 bankruptcy in Monroe, LA, you may be relieved to know that it can be an effective solution for individuals who want to reorganize their debts and gain some financial stability. Unlike Chapter 7 bankruptcy, which involves liquidating assets to pay off creditors, Chapter 13 bankruptcy allows you to keep your assets while repaying your debts over a period of three to five years.
Chapter 13 provides a path to financial stability by allowing you to restructure your debts and create a repayment plan that fits your budget. While the process can be complex, working with an experienced Monroe bankruptcy attorney like E. Orum Young Law, The Bankruptcy Specialist, can help you navigate the process and achieve a successful outcome. Our team can provide you with a free case review and help you determine if you qualify for Chapter 13 bankruptcy in Monroe, LA.
Orum Young Law, The Bankruptcy Specialist has been solving debt problems for more than three decades and has filed more bankruptcies than any other attorney in Northeast Louisiana. With our experience and expertise, we can help you get the financial relief you need.
Chapter 13: What is it and How Does it Work in Louisiana?
Chapter 13 bankruptcy is a legal process that can help individuals reorganize their debts and gain financial stability. In Louisiana, anyone who has a regular income and owes less than $1,257,850 in secured debt and less than $419,275 in unsecured debt can file for Chapter 13 bankruptcy. However, filing for bankruptcy can be a complex process, and working with an experienced bankruptcy attorney is important to ensure that you understand your options and make informed decisions.
Once you file for Chapter 13 bankruptcy, an automatic stay goes into effect, which stops creditors from collecting a debt or taking legal action against you. You will then work with your attorney to create a repayment plan that fits your budget and allows you to repay your debts over a period of three to five years. The amount you pay each month will be based on your income, expenses, and the types of debts you owe.
During the repayment period, you will make monthly payments to a trustee, who will distribute the funds to your creditors according to the terms of your repayment plan. Once you complete your repayment plan, any remaining unsecured debts will be discharged, which means that you will no longer be responsible for paying them. However, it’s important to note that some types of debt, such as student loans and certain tax debts, may not be dischargeable.
At E. Orum Young Law, our experienced bankruptcy attorneys can help you navigate the Chapter 13 bankruptcy process and achieve a successful outcome. With over three decades of experience solving debt problems for clients in Northeast Louisiana, we file more bankruptcies than any other attorney in the region. Contact us today to schedule a free case review and take the first step towards regaining control of your finances.
Understanding the Bankruptcy Means Test in Louisiana
Bankruptcy laws in Louisiana require individuals to undergo a means test to determine their eligibility for filing Chapter 7 or Chapter 13 bankruptcy. The means test compares an individual’s income to the median income for households of the same size in Louisiana.
If an individual’s income is less than the median income, they can file for Chapter 7 bankruptcy and opt for a three-year repayment plan under Chapter 13. On the other hand, if the individual’s income is higher than Louisiana’s median income, they may still be eligible for Chapter 7 bankruptcy, but they must provide detailed information about their expenses and payments on secured debts to determine their eligibility. This information is also required for most Chapter 13 cases.
To determine eligibility, certain living expenses are deducted from gross income to calculate disposable income. If disposable income exceeds a specific amount, an individual may not be eligible for Chapter 7 discharge. It’s essential to use the latest mean test data when calculating eligibility. The current data is valid for bankruptcy cases filed on or after May 15, 2022, and takes into account the number of individuals in the household.
To complete the means test, an individual must fill out either Form 22A (Statement of Current Monthly Income and Means Test Calculation) for Chapter 7 or Form 22C (Statement of Current Monthly Income and Calculation of Commitment Period and Disposable Income) for Chapter 13. These forms require detailed information about an individual’s income, expenses, and debts. Here are some examples of how the means test works in practice:
- If a household of four in Louisiana has a monthly income of $5,000, which is less than the median income of $6,000, they are eligible for Chapter 7 bankruptcy.
- If an individual’s monthly income is $8,000, which is higher than the median income, they must fill out Form 22A or 22C to determine their eligibility for Chapter 7 or Chapter 13 bankruptcy.
- If an individual’s disposable income is above a specific amount, they may not be eligible for Chapter 7 bankruptcy but may qualify for Chapter 13.
Who Can File for Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is designed for individuals, not businesses. It allows individuals to reorganize their debts and create a repayment plan to pay off their creditors over a period of three to five years.
Businesses, on the other hand, typically file for Chapter 11 bankruptcy, which is a form of bankruptcy that allows for the reorganization of a business. Chapter 11 bankruptcy is more complex and expensive than Chapter 13 bankruptcy.
While Chapter 13 bankruptcy is not available for businesses, individuals who own a small business as a sole proprietorship may be eligible to file for Chapter 13 bankruptcy. In these cases, the individual’s personal debts and business debts are treated together in the repayment plan.
Qualifications for Chapter 13 Bankruptcy
To be eligible for Chapter 13, certain criteria must be met:
- Maintain a regular source of income.
One of the main requirements for Chapter 13 bankruptcy is that you have a regular source of income. This can come from various sources such as pension income, Social Security payments, unemployment compensation, royalties, rent, and income from the sale of a property.
- Meet the timeline requirements for prior bankruptcy filings.
If you have filed for bankruptcy before, you may still be eligible for Chapter 13, but there are certain timeline requirements that you must meet. You cannot file a Chapter 13 petition within two years of filing a prior Chapter 13 petition or within four years of filing a prior Chapter 7 petition. Additionally, you must be up to date with your tax filings.
If you are unable to meet these requirements, your case may be postponed until you are able to do so. Failure to produce or provide transcripts of your returns could result in the dismissal of your case.
- Meet the debt limits.
Your unsecured debt must not exceed $419,275, and your secured debt must not exceed $1,257,850.
Filing for Chapter 13 bankruptcy suspends pending foreclosures and debt payments, providing a respite from creditors while the court reviews your plan. The trustee plays a crucial role in the process of evaluating your debt and income statements and arranging a hearing to determine the feasibility of your proposed plan. Once the repayments have been made, the Chapter 13 case will be closed. The repayment period normally lasts for three to five years.
It’s important to keep in mind that filing for bankruptcy does not eradicate debt, but a successful reorganization plan may enable you to maintain regular mortgage payments and retain your home. However, there are some circumstances in which a home may still be subject to foreclosure or other actions by creditors.
Credit Counseling and Debtor Education
Apart from meeting the aforementioned requirements, it is essential to demonstrate that you received credit counseling from an agency authorized by the U.S. Trustee in Louisiana within six months prior to filing for bankruptcy. Additionally, you must complete a debtor education course before obtaining a discharge from bankruptcy.
Why Do I Need a Chapter 13 Bankruptcy Lawyer in Monroe, Louisiana?
Filing for Chapter 13 bankruptcy in Monroe, Louisiana, can be a complex and confusing process. While individuals are allowed to file for bankruptcy on their own, it’s strongly recommended to hire an experienced bankruptcy lawyer who can provide valuable guidance and support throughout the entire process.
Here are some reasons why hiring a Chapter 13 bankruptcy lawyer in Monroe, Louisiana, is important:
- Legal Expertise: Bankruptcy laws can be complicated, and each case is unique. An experienced Chapter 13 bankruptcy lawyer in Monroe, Louisiana, has in-depth knowledge and expertise in bankruptcy laws and can provide you with legal advice on your specific situation.
- Proper Filing: Filing for Chapter 13 bankruptcy requires extensive paperwork and documentation. Your bankruptcy lawyer can help you fill out and file the necessary forms accurately and on time. They will ensure that all the information provided is accurate and up-to-date.
- Representation: A bankruptcy lawyer can represent you in court and communicate with your creditors on your behalf. This can reduce your stress and give you peace of mind that your legal representation is handling everything.
- Protection: A bankruptcy lawyer can help protect you from creditor harassment, wage garnishments, and repossession of your assets during the bankruptcy process.
- Plan Creation: Your bankruptcy lawyer can help create a repayment plan that works for you and your financial situation. They will ensure that the plan is reasonable and feasible for you to complete.
- Court Proceedings: A bankruptcy lawyer can represent you in court proceedings and help negotiate with creditors to lower the amount you owe.
Get Your Finances Back on Track: Monroe Bankruptcy Attorney at Your Service
Are you struggling to make ends meet and drowning in debt? If you’re wondering who can declare Chapter 13 bankruptcy in Monroe, LA, E. Orum Young Law, The Bankruptcy Specialist is here to help.
Our team of experienced Monroe bankruptcy attorneys understands the complexities of bankruptcy law and can guide you through the process of filing for Chapter 13 or Chapter 7 bankruptcy. With a free case review, we can help you assess your financial situation and determine the best course of action to get you back on track.
Don’t let debt hold you back from living your life. Contact E. Orum Young Law, The Bankruptcy Specialist today, and take the first step towards a brighter financial future.