If you live in western Louisiana and are overwhelmed by debt, you may be considering personal bankruptcy as a way to regain financial stability. While Chapter 7 and Chapter 13 bankruptcies are the two primary options available to individuals, these processes work very differently. Each chapter comes with its own eligibility rules, timelines, and advantages, depending on your income, assets, and financial goals.
Understanding these differences is an important step in deciding which path may help you rebuild your financial life. Below, we break down each chapter in detail and explain how residents of Shreveport, Lafayette, Alexandria, and surrounding areas can begin the process with help from the experienced attorneys at Simon Fitzgerald, LLC.
What is Chapter 7 Bankruptcy?
Chapter 7 is often described as the most straightforward form of bankruptcy for individuals. It is usually best suited for people whose debt has become completely unmanageable and who do not have the income needed to make monthly payments toward what they owe.
Passing the Chapter 7 Means Test
To qualify for Chapter 7, you must pass the means test. This test looks at your household income and compares it to the median income for households of the same size in Louisiana. If your income is below the state median, you generally qualify.
If your income is slightly higher, you may still pass after subtracting certain allowed expenses such as housing, medical costs, and transportation.
Residents in western Louisiana often find the means test confusing, but an attorney at Simon Fitzgerald, LLC can evaluate your situation quickly and let you know where you stand.
What Happens to Your Assets in Chapter 7
Chapter 7 is known as a “liquidation” bankruptcy, but that does not mean you lose everything. Louisiana provides several exemptions that allow you to protect essential property, such as:
- Your primary residence (up to Louisiana’s homestead exemption limit)
- Household goods
- Tools of your trade
- Certain personal property and retirement funds
In many cases, especially for individuals in Shreveport, Lafayette, or Alexandria with modest assets, Chapter 7 results in a “no-asset” case, meaning nothing is taken or sold.
Will Chapter 7 Discharge My Debts?
Once the Chapter 7 process is complete, qualifying debts such as credit cards, medical bills, payday loans, and personal loans are wiped out permanently. This gives you the chance to restart your financial life without being dragged down by old obligations.
How Long Chapter 7 Takes
Most Chapter 7 cases in Louisiana are completed in about three to five months, making it the fastest path to a fresh start.
Learning More About Chapter 13 Bankruptcy
Chapter 13 is designed for people who have steady income, want to protect significant assets, or need time to catch up on past-due payments.
Creating a Repayment Plan You Can Afford
Instead of eliminating your debts immediately, Chapter 13 restructures them into a repayment plan lasting three to five years. This plan is customized to your income, expenses, and goals. You make one monthly payment to the bankruptcy trustee, who then distributes the funds to your creditors.
For many people in western Louisiana, this makes repayment far more manageable.
Protecting Your Home, Vehicle, and Other Property
One of the biggest advantages of Chapter 13 is the ability to stop foreclosure, prevent vehicle repossession, and protect valuable property. If you are behind on mortgage or car payments, Chapter 13 gives you time to catch up while keeping your home or vehicle.
Many Louisiana residents choose Chapter 13 specifically for this reason.
Who Benefits Most From Chapter 13
Chapter 13 may be a better fit if you:
- Earn too much to qualify for Chapter 7
- Own property you want to keep
- Are behind on your mortgage or car payments
- Have non-dischargeable debts such as certain taxes or domestic support obligations
- Want to consolidate your debts into one predictable monthly payment
How Long Chapter 13 Takes
A Chapter 13 plan typically lasts three to five years. Once you complete the plan, remaining eligible debts may be discharged, giving you a stronger long-term financial outlook.
How to Start Your Bankruptcy Process in Western Louisiana
Beginning the bankruptcy process does not have to be stressful. With the right guidance, you can quickly understand your options and take the first steps toward financial relief.
Schedule a free consultation
Speak with an attorney who serves clients in Shreveport, Lafayette, Alexandria, and nearby areas. Simon Fitzgerald, LLC will review your income, debt, assets, and goals.
Gather your financial documents
This includes pay stubs, tax returns, bills, loan statements, mortgage information, and bank records.
Complete the required credit counseling course
This is a short online or phone-based course required before filing.
Determine whether Chapter 7 or Chapter 13 fits your situation
Your attorney will walk you through the pros and cons of each option based on Louisiana law.
Prepare and file your bankruptcy petition
Your attorney ensures all forms are complete and accurate to avoid delays or issues with the court.
Attend the meeting of creditors
This is a brief meeting where you answer routine questions about your finances. Most cases involve no creditors showing up.
Follow the next steps depending on your chapter
Chapter 7 involves waiting for discharge. Chapter 13 involves beginning your monthly repayment plan.
With a local law firm guiding you, the process is manageable and often far less intimidating than people expect.
FAQs about Chapter 7 & 13 Bankruptcies
Will bankruptcy stop wage garnishments in Louisiana?
Yes. Filing either Chapter 7 or Chapter 13 places an automatic stay on collection actions, including wage garnishments.
Can bankruptcy help if I’m facing eviction or foreclosure?
Chapter 13 can help you catch up on missed mortgage payments. Chapter 7 may delay eviction or foreclosure temporarily through the automatic stay.
Will I have to go to court?
Not usually. Most people only attend the meeting of creditors, which is informal and typically lasts less than 15 minutes.
Can I keep my car if I file for bankruptcy?
In many cases, yes. Louisiana exemptions may protect your vehicle in Chapter 7, and Chapter 13 allows you to catch up on missed payments.
How will bankruptcy affect my credit score?
Your credit score may drop initially, but many clients begin rebuilding credit within a year through responsible financial habits.
Do both types of bankruptcy remove medical debt?
Yes. Medical debt is generally dischargeable in both Chapter 7 and Chapter 13.
What if I have filed bankruptcy before?
You may still be eligible, depending on how long it has been since your previous filing and which chapter you filed under.
Should I try debt settlement instead of bankruptcy?
Debt settlement can sometimes work, but it often costs more, takes longer, and does not offer the legal protections or certainty of bankruptcy. A consultation can help you compare your options.
Call a Louisiana Bankruptcy Attorney for Help Today
Whether you need to file for Chapter 7 or Chapter 13 bankruptcies, you need the guidance of a skilled and experienced bankruptcy attorney. Simon Fitzgerald, LLC’s team of bankruptcy attorneys understands how confused you might feel about your situation, and we’re here to let you know that your circumstances are not hopeless. We will help you identify the resolution to fix your debt problems with compassion.
Call (318) 284-5565 or fill out our consultation form to schedule a meeting.
