Can you keep your home in a Chapter 7 bankruptcy?

Many consumers assume that filing for Chapter 7 bankruptcy means they lose everything, including their homes. However, sometimes this is not the case. Louisiana, like most states, offers homestead exemptions. If you plan to file for bankruptcy, it is important that you review the state’s homestead exemption laws so that you thoroughly understand your rights. The National Bankruptcy Forum provides you with the information you need to know.

Many states allow consumers to choose between federal exemptions and state exemptions. However, Louisiana is not one of those states. If you file for bankruptcy in the state, you must utilize state exemptions. Fortunately, Louisiana’s exemptions are fairly generous.

Louisiana’s homestead exemption allows you to keep up to $35,000 in real property. If you live within the city limits, you may keep up to five acres. However, if you live outside of city limits, you may keep property on up to 200 acres. The state doubles this exemption if you are married or filing jointly.

You may also keep up to $5,000 in engagement and wedding rings and up to $2,500 in firearms. The state makes other exemptions for certain household goods, pets and furniture.

When you file for bankruptcy, you may also keep up to 75% of your disposable income, or 30 times the federal minimum wage, whichever is greater. If you own a vehicle, you can exempt up to $7,500. The state doubles the vehicle exemption for those who are married or file jointly.

It is important to bear in mind that exemptions refer to the equity in a property as opposed to the value of the property.

This article should not be viewed as legal advice. It is for educational purposes only.