Bankruptcy is a legal procedure allowing a person or business to have their debts excused, in part or in whole. It is typically treated as a last resort, because, while it can prevent financial catastrophe, it has some influential long-term consequences. This warrants careful consideration of the costs and benefits. Bankruptcy is a creation of federal law, and goes through federal courts. Therefore, the procedure governing bankruptcy in Louisiana will be roughly the same as it is anywhere else in the U.S. But individual courts have different rules for what property is exempt, so you should consult a local Jefferson Parish, Louisiana before you file.
Chapter 7 Bankruptcy in Jefferson Parish, Louisiana
There are 2 typical types of bankruptcy in Jefferson Parish, Louisiana. They are known as Chapter 7 and Chapter 13 Bankruptcy. Chapter 7 involves liquidation of some of a debtor's assets. It requires that a certain percentage of the debtor's property to be sold to pay off as much debt as possible. The majority of property that most people own, however, is exempt. This typically includes homes, vehicles, retirement accounts, and others. These are not available to creditors.
Once the non-exempt property is sold, the rest of the dischargeable debt is eliminated. Some types of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in Jefferson Parish, Louisiana is not dischargeable, Chapter 7 may not be the best option.
Chapter 13 Bankruptcy in Jefferson Parish, Louisiana
Chapter 13 Bankruptcy in Jefferson Parish, Louisiana is very different from Chapter 7. Whether or not it is a better option is highly dependent on the facts of each distinct case. Chapter 13 does not excuse debt, but restructures it instead. Typically, various debts are consolidated into a single monthly payment. This is designed to make the debt more manageable, giving the debtor the chance to pay off the debt over a longer period of time, without all of it coming due at once. This is typically manageable, as long as the debtor can make some sacrifices.
Which Type of Consumer Bankruptcy Should I File in Jefferson Parish, Louisiana
Whether Chapter 7 or Chapter 13 is the right choice for you depends heavily on your distinct situation. If you have a steady income stream, and a lot of non-exempt property, Chapter 13 might be right for you. If you don't have a steady income, and most of your property is exempt, Chapter 7 might be a better way to go.
Of course, you should always seek the counsel of an experienced local Jefferson Parish, Louisiana bankruptcy attorney before you make the decision to file. He or she will be able to advise you of your options, and suggest the best possible course of action for your specific situation.