Bankruptcy in Louisiana is a legal process through which some of the debts of an individual or a business are absolved (excused). You should not view bankruptcy as an opportunity to eliminate your debts just because you don't feel like paying them - it can be a long and difficult procedure. Bankruptcy is designed to be a last resort to prevent complete financial ruin, while allowing creditors to collect at least some of their debts in an orderly fashion. Filing for bankruptcy can have major negative effects on one's credit score, which will make it more difficult to get loans in the future.
Accordingly, if you are considering bankruptcy as an option, you need to thoroughly examine the costs and benefits. A good Louisiana bankruptcy lawyer can advise you as to the pros and cons of bankruptcy, and give his or her expert opinion about whether or not bankruptcy is a good option, based on the facts of your individual case.
Types of Bankruptcy in Louisiana
Bankruptcy is governed by federal law, so the procedures in filing for bankruptcy in Louisiana will be the same as everywhere else in the United States. There are 2 basic forms of bankruptcy that consumers typically use: Chapter 7, and Chapter 13, owing their names to where they are found in the U.S. Bankruptcy Code. Additionally, there is a form of bankruptcy typically used by businesses called Chapter 11. Chapter 11 is available to individuals, but it is rarely the best option for them.
Chapter 7 bankruptcy in Louisiana is sometimes called "liquidation" because it involves the forced sale of some (though certainly not all) of the debtor's assets. The bankruptcy court will appoint a trustee to oversee the appraisal and sale of some of the debtor's property, and the proceeds from the sale will go to the creditors, in their order of priority. Certain forms of property are exempt, and do not need to be sold, including houses and insurance policies. Once the property is sold, and the proceeds given to the creditors, the rest of the debt is excused. When Chapter 13 bankrutpcy is filed, the debt is reorganized instead of excused. Essentially, the court, the debtor, and the creditors will work out a repayment plan that the debtor can manage, and will result in most of the debt being paid off, hopefully in a reasonable period of time.
Chapter 11 bankruptcy is usually used by businesses, rather than individuals. Much like Chapter 13, it involves reorganization of debts. It compels the debtor to come up with a reorganization plan, but this plan has to be approved by a majority vote of participating creditors. Once it is approved, the company is obligated to carry it out.
How Can a Louisiana Bankruptcy Lawyer Help?
Making the decision to file for bankruptcy can be extremely difficult, given the potential consequences. A Louisiana lawyer specializing in bankruptcy can advise you of the likely consequences you will face if you file, and help you determine if they are outweighed by the potential benefits.
Interesting Facts About Louisiana
Louisiana became a U.S. state in 1812. The territory was obtained from France through the Louisiana Purchase, for a total worth of $15 million at the time. The state has a cultural-linguistic atmosphere unlike any other area in the U.S., due to the French, Spanish, Native American, African, and Caribbean influences.
Much of Louisiana's laws and government structure are unique among U.S. states. For example, Louisiana is the only state to have government units called "parishes". These are equivalent to counties in other states. Another feature of Louisiana governance is its extensive system of civil law based on Spanish and French systems. The majority of countries use some form of civil law, which is based mainly on codified statutes. Most of American law is common law- that is, derived from judge-made court decisions.
Louisiana's court system is structurally similar to most states, with a Supreme Court, Court of Appeals, and District Courts. However, because of the civil law influence, the Court of Appeals tends to have much broader discretion when reviewing trials. Also, the Louisiana state Constitution does not directly provide for the right to a jury trial for civil cases. The distribution of damages is also different in Louisiana.
Although Louisiana law is so distinct, lawyers in Louisiana understand how to interpret the state's legal code. Louisiana lawyers carefully review state laws when assisting clients. Depending on your legal dispute or issue, it may be necessary to obtain the expertise of an attorney in Louisiana.