Filing for bankruptcy in Louisiana is a route you should only take once you have tried other ways to eliminate your debt. If you are unsuccessful, bankruptcy may be your only option. Depending on your circumstances, you may want to know what the rules are for filing more than once.
What is Chapter 7 bankruptcy?
With Chapter 7 bankruptcy, you seek to eliminate your debt through liquidation. All of your debt is discharged while your nonexempt property is sold so that the money earned from the sale can be given to your creditors to pay back what you owe them. Through Chapter 7, you may be able to keep your home and important possessions like your vehicle, jewelry and personal items.
What is Chapter 13 bankruptcy?
Chapter 13 bankruptcy gives you the opportunity to reorganize your debt and repay what you owe over three to five years. Debts aren’t discharged, but you can have all of your debt consolidated into a single lump sum. You’ll make monthly payments to a trustee on your case, and the trustee sends payments to your creditors.
What is the 2-4-6-8 rule of bankruptcy?
If your circumstances mean that you have to file for bankruptcy more than once, you will have to rely on the 2-4-6-8 rule. How often you can apply for bankruptcy depends on which type you’re filing; filing for Chapter 7 carries different rules than when you file for Chapter 13 bankruptcy. The rule is as follows:
- If you want to file for Chapter 13 bankruptcy after you have already filed for Chapter 13, you must wait for two years.
- If you want to file Chapter 13 bankruptcy after you have already filed for Chapter 17, you have to wait four years.
- If you want to file Chapter 7 bankruptcy after already having filed for Chapter 13 bankruptcy, you must wait for six years.
- If you want to file Chapter 7 bankruptcy after having already filed for Chapter 7, you must wait for eight years to do so.
When you file Chapter 13 bankruptcy immediately after Chapter 7, it’s known as Chapter 20 bankruptcy. This method doesn’t allow you to discharge your debts as it doesn’t require waiting four years between filings. However, Chapter 20 bankruptcy does give you more time to pay off your debts.
Bankruptcy is a great option for people who have massive debt and no foreseeable way to pay it back. It might be the best option for you.