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Louisiana Bankruptcy Laws
While Louisiana has a greater percentage of clients choosing Chapter 13 than most states, 65%, there are still thousands who will choose Chapter 7 and hope to protect most, if not all, of their personal property. There are a number of exemptions they can choose under state law, since federal exemptions are not allowed:
Homestead |
Up to $25,000, although full value may be exempt if debts are the result of catastrophic or terminal illness or injury |
Personal Property |
Cemetery plot; spendthrift trusts; furnishings, clothing, household goods and appliances, military accessories, farm stock, and some jewelry, up to $5,000; motor vehicles up to $7,500 |
Wages |
Either 30 times the federal hourly minimum wage/wk. or minimum 75% of disposable weekly earnings |
Pensions |
Tax exempt retirement accounts; Traditional and Roth IRAs up to $1,095,000/person; ERISA-qualified benefits; most educational and public employees; firefighters; police |
Public Benefits |
Worker’s comp; unemployment; earned income tax credit; public assistance; aid to the blind, aged, and disabled; crime victims’ compensation |
Tools of the Trade |
Up to $7,500 of tools, instruments, books, motor vehicles; one firearm up to $500 |
Insurance |
Fraternal benefits; health, accident or disability proceeds; some types of insurances proceeds; group insurance |
All these elements are claimed or reported in the bankruptcy petition filed with the court once the required credit counseling is completed. The judge then places a temporary stay on all collection processes, while the bankruptcy trustee investigates and executes the bankruptcy. Once a debtor and their attorney attend a mandatory 341 meeting to answer all questions about the divorce, the petition can generally be granted and the debtor can start fresh rebuilding their economic future.
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