When individuals in western Louisiana consider bankruptcy, one of the first concerns is whether they will lose their home, vehicle, or other essential property. Fortunately, both Chapter 7 and Chapter 13 bankruptcies allow most people to keep a significant amount of their assets through Louisiana’s state exemptions.
Louisiana requires residents to use Louisiana’s own exemption system rather than choosing between state and federal exemptions. Understanding how these exemptions work can help you make an informed decision about the bankruptcy process and ease many of the fears that come with filing.
Louisiana’s Homestead Exemption
Louisiana’s homestead exemption protects up to $35,000 of equity in your home and adjoining land. This applies whether you live in Shreveport, Lafayette, Alexandria, or surrounding parishes. The law limits the protected land to:
-
Up to five acres in urban or suburban areas
-
Up to 200 acres in rural areas
If your bankruptcy filing is connected to catastrophic medical costs or a severe injury, Louisiana law may allow you to protect all of your home equity. These protections fall under Louisiana bankruptcy exemptions.
Louisiana Exemptions for Personal Property
Louisiana offers numerous exemptions that allow you to keep property necessary for daily life, work, and family obligations. These exemptions generally apply regardless of whether you file Chapter 7 or Chapter 13.
Your exempt property may include:
-
Up to $7,500 in equity for one motor vehicle
-
An additional $7,500 in equity for a second vehicle used by a disabled household member
-
Burial plots
-
Firearms and ammunition up to a combined value of $2,500
-
Engagement and wedding rings up to $5,000
-
Household pets and livestock (with a limit of one cow)
-
Musical instruments
-
Military gear and items
-
Family portraits
-
Clothing
-
Appliances and furniture
-
Essential household goods
-
Tools necessary for your trade or profession
In addition to physical property, certain financial protections also apply:
-
Life insurance and pension benefits
-
Tax-exempt retirement plans
-
A portion of wages: up to 30 times the federal minimum wage or 75% of your salary, whichever is greater
More details on these protections can be found in our guide to what property you can keep in bankruptcy.
If you are filing jointly with your spouse, Louisiana allows you to double most exemption amounts except for the homestead exemption.
Chapter 7 Bankruptcy and Asset Protection
Chapter 7 bankruptcy is often the option people worry about most when it comes to losing property. While Chapter 7 does involve the possibility of selling non-exempt assets, most individuals in western Louisiana qualify for a no-asset case, meaning everything they own falls within Louisiana’s exemption limits.
How Exemptions Work in Chapter 7
When you file for Chapter 7, the trustee reviews your assets and applies Louisiana’s exemption rules. If all of your property fits within these exemptions, the trustee cannot liquidate anything.
Many clients discover they can keep their:
-
Home (within the homestead limits)
-
Primary vehicle
-
Household furnishings
-
Clothing and personal items
-
Retirement accounts
-
Work tools
This outcome is common for residents in Shreveport, Lafayette, and Alexandria with modest income or limited equity, particularly those who qualify under the bankruptcy means test.
What Happens to Non-Exempt Assets in Chapter 7
If you own property that exceeds Louisiana’s exemption limits, the trustee may sell it to repay creditors. This situation is far less common than people expect. Reviewing your assets ahead of time with a lawyer experienced in Louisiana bankruptcy exemptions can help avoid surprises.
Why Many People Still Choose Chapter 7
Even with the potential for asset liquidation, Chapter 7 remains appealing because it eliminates qualifying debts quickly and without long-term repayment obligations. You can learn more about how cases conclude in how a bankruptcy case ends.
Chapter 13 Bankruptcy and Asset Protection
Unlike Chapter 7, Chapter 13 bankruptcy does not require liquidation of your assets. Instead, it reorganizes your debts into a three- to five-year repayment plan, allowing you to keep property even if it would not be fully exempt in a Chapter 7 case.
How Chapter 13 Protects Your Property
Because no assets are sold in Chapter 13, this chapter is often chosen by individuals who:
-
Own homes with significant equity
-
Have multiple vehicles
-
Have non-exempt valuables they want to retain
-
Need more time to catch up on mortgage or car payments
The repayment plan ensures creditors receive at least what they would have received had your non-exempt property been sold in Chapter 7. This structure is explained further in how Chapter 13 works.
Saving Your Home and Vehicle
Chapter 13 is particularly helpful for residents behind on mortgage or vehicle payments. Filing triggers the automatic stay, which stops foreclosure and repossession while you get back on track.
Who Benefits Most From Chapter 13
A Chapter 13 filing may be the better option if:
-
Your income is too high for Chapter 7
-
You own property far above exemption limits
-
You want to protect assets while consolidating debts
-
You need structured time to repay certain obligations
For a side-by-side breakdown, see our Chapter 7 vs. Chapter 13 comparison.
How to Start Your Bankruptcy Process in Western Louisiana
The process of determining what you can keep begins with a careful review of your financial situation. Starting with knowledgeable guidance can prevent surprises and protect your most important assets.
-
Schedule a consultation with a local bankruptcy attorney.
Simon Fitzgerald, LLC serves clients throughout Shreveport, Lafayette, and Alexandria. -
Gather financial documents such as income records, bank statements, lists of assets, loan statements, and recent bills.
-
Complete the required pre-bankruptcy credit counseling course.
-
Review your property and exemptions with your attorney to determine whether Chapter 7 or Chapter 13 aligns with your goals.
-
Prepare and file your bankruptcy petition.
-
Attend the meeting of creditors.
-
Follow the remaining steps based on your chapter, whether receiving a quick discharge under Chapter 7 or beginning your repayment plan under Chapter 13.
Frequently Asked Questions About Keeping Assets in Louisiana Bankruptcy
Can I keep my home if I’m behind on mortgage payments?
Chapter 13 allows you to catch up on past-due mortgage payments and stop foreclosure.
What happens if my vehicle is worth more than the exemption limit?
In Chapter 7, the trustee may consider selling it, but many cases can be resolved by switching to Chapter 13.
Are retirement accounts protected in bankruptcy?
Most tax-exempt retirement accounts are fully protected under Louisiana law.
Will I lose my personal belongings or household furniture?
Louisiana exemptions protect a wide range of everyday household items.
Can I keep tools and equipment used for my job?
Yes. Tools of your trade are generally exempt.
How do exemptions work if I’m married and filing jointly?
Most exemption amounts can be doubled for joint filers.
What if I received an inheritance or settlement recently?
Timing and value matter. In some cases, Chapter 13 may offer stronger protection.
Contact a Louisiana Bankruptcy Lawyer Now
Protecting your assets can be complicated if you are not sure what’s exempt and what isn’t. With guidance from an experienced attorney at Simon Fitzgerald, LLC, you can make informed decisions and avoid unnecessary losses.
Call (318) 284-5565 to schedule your consultation today.
