Louisiana household debt is on the rise, which is why so many individuals and families across Shreveport, Monroe, Alexandria, Lafayette, and Lake Charles find themselves struggling to make it from paycheck to paycheck. While bankruptcy relief is available to most Louisiana residents who are dealing with overwhelming debt, you’ll need to meet certain eligibility requirements before the Western District of Louisiana bankruptcy court will approve your filing.
Factors like average income, debt type, and previous bankruptcy filings determine whether you qualify for Chapter 7 or Chapter 13 bankruptcy, while other criteria dictate whether you can file at all. In this guide, we’ll go over what you need to know about the eligibility requirements to file for personal bankruptcy in Louisiana.
With over 100 years of combined experience as Louisiana’s oldest bankruptcy law firm, the attorneys at Simon Fitzgerald LLC have helped thousands of Louisiana residents qualify for bankruptcy protection and achieve financial freedom. Our profound understanding of local bankruptcy courts in Shreveport, Monroe, Alexandria, Lafayette, and Lake Charles allows us to guide you through the eligibility requirements with confidence and precision.
Preliminary Requirements for Bankruptcy
Before we discuss the criteria for each personal bankruptcy chapter, let’s examine state-specific eligibility requirements.
Residency Requirement
To file for bankruptcy in Louisiana, you must have lived in the state for at least 91 of the past 180 days before filing. This rule prevents individuals from moving to Louisiana solely to take advantage of the state’s bankruptcy exemptions. If you have recently relocated, you may need to file in your previous state or wait until you meet the residency requirement.
Additionally, to use Louisiana’s state-specific bankruptcy exemptions, you must have lived in the state for at least 730 days (two years) before filing. Otherwise, the bankruptcy court may apply the exemptions from your previous state of residence.
Credit Counseling Requirement
Before filing, all bankruptcy applicants must complete a credit counseling course from an agency approved by the U.S. Trustee’s Office. This course, which must be taken within 180 days before submitting your bankruptcy petition, does the following:
- This course explores alternatives to bankruptcy, such as debt settlement or repayment plans.
- This course provides financial education to help you manage money more effectively.
- After you complete this course, you will receive a certificate of completion, which you must file with your bankruptcy petition.
Failure to complete credit counseling before filing may result in your case being dismissed. However, exceptions may be granted in cases of emergency filings or extreme hardship, such as medical incapacity.
These initial requirements are just the first steps in determining bankruptcy eligibility. Other factors, such as annual income limits, debt type, and prior bankruptcy filings, also play a role in whether you qualify for Chapter 7 or Chapter 13 debt relief.
What are the Requirements for Chapter 7 Bankruptcy?
Chapter 7 bankruptcy in Louisiana provides a way to eliminate unsecured debts like credit card debt and medical bills, but not everyone qualifies. Louisiana bankruptcy courts follow federal bankruptcy laws when determining eligibility for Chapter 7 protection. Shreveport, Monroe, and Alexandria filers must pass specific income and financial tests before proceeding with their bankruptcy case.
The Means Test
To file for Chapter 7, you must pass the means test, which compares your average household income to Louisiana’s median income for your household size. If your income is below the median, you automatically qualify. If it’s above, you must complete a detailed financial review to determine whether you have enough disposable income to repay debts through Chapter 13 instead.
As of May 2025, the median income limits in Louisiana are:
- 1-person household: $53,677
- 2-person household: $69,288
- 3-person household: $78,616
- 4-person household: $98,041
There are some exceptions to these income limits. Even if your earnings exceed the threshold, you may still qualify for Chapter 7 if your necessary monthly expenses—such as living costs, secured debt payments, and other financial obligations significantly reduce your disposable income. If little to no disposable income remains after these deductions, you may still be eligible.
Prior Bankruptcy Filings
If you previously filed for Chapter 7 bankruptcy, you must wait eight years from the date of your last filing before you can file again. If you filed for Chapter 13, the waiting period is typically six years unless you repaid at least 70% of your unsecured debts in that case.
Debt Type and Fraud Considerations
Chapter 7 is best suited for unsecured debts like credit cards, medical bills, and personal loans. However, some types of debt cannot be discharged, including:
- Child support payments and alimony
- Most tax debts
- Government fines and criminal restitution
- Student loans (except in rare cases of undue hardship)
In addition, if you recently took out large loans or made luxury purchases, creditors may challenge your filing, arguing that the debt was incurred in bad faith. Any signs of fraud, misrepresentation, or asset transfers before filing could result in case dismissal or legal consequences.
Failure to Meet Chapter 7 Bankruptcy Criteria
Qualifying for Chapter 7 in Louisiana depends on income, debt type, and financial history. If you don’t meet these requirements, Chapter 13 bankruptcy may be a better option because it allows you to reorganize debts into a structured payment plan. Consulting with a Louisiana bankruptcy attorney can help you determine the best path forward.
Not Sure If You Qualify for Chapter 7?
Our Louisiana bankruptcy attorneys can review your income, debts, and financial situation to determine your eligibility. Schedule a free consultation today by calling our nearest office:
- Shreveport: 318-868-2600
- Monroe (served by Shreveport Office):
- Alexandria: 318-625-7505
- Lafayette: 337-984-1584
- Lake Charles (served by Lafayette Office): 337-984-1584
What are the Eligibility Requirements for Chapter 13 Bankruptcy?
Chapter 13 bankruptcy, also called a wage earner’s plan, allows people to reorganize their debts into a court-approved repayment plan over three to five years. Unlike Chapter 7, it does not require passing a means test or liquidating nonexempt assets. However, there are still strict eligibility requirements under Louisiana and federal bankruptcy laws.
Regular Income Requirement
To qualify for Chapter 13, you must have a consistent source of monthly income that allows you to make regular monthly payments toward your debt load. This income can come from:
- Wages or salary
- Self-employment or business earnings
- Government benefits (Social Security, VA disability, etc.)
- Pension or retirement income
- Rental income or alimony
The court will review your income and actual expenses to confirm that you have enough disposable income to afford the repayment plan after covering essential living costs.
Debt Limits
Chapter 13 is only available to those with debts below certain limits, which are adjusted periodically. As of 2024, the debt limits are:
- Unsecured Debts (credit card debt, medical bills, personal loans, etc.): $465,275
- Secured Debts (mortgages, car loans, etc.): $1,395,875
Up-to-Date Tax Filings
Before filing for Chapter 13, you must provide proof that you have filed all required federal and state tax returns for the past four years. The court may dismiss your case if your tax filings are incomplete or if you fail to submit the requested documentation.
Ability to Complete the Repayment Plan
Your proposed repayment plan must be realistic and sustainable. The court will evaluate whether
- Your monthly income is stable enough to cover plan payments.
- You can pay priority debts in full (e.g., recent taxes, child support, alimony).
- Secured creditors (like mortgage lenders) receive at least the value of their collateral.
If your income is too low or inconsistent, the bankruptcy judge may deny your Chapter 13 filing or suggest Chapter 7 instead.
Who Should Consider Chapter 13?
Chapter 13 may be the right type of bankruptcy protection if you:
- You want to keep your home but need time to catch up on missed mortgage payments.
- Have too much income for Chapter 7 but still struggle with debt.
- There is a need to protect valuable assets, such as a car or business equipment.
- Owe non-dischargeable debts (like tax debts or child support) that require structured repayment.
Chapter 13 offers a structured way to regain financial control, but you must meet the eligibility criteria. An experienced bankruptcy attorney can help determine whether you qualify and guide you through the bankruptcy process.
Client Success Story
“When I finally ‘surrendered’ and went to Simon Fitzgerald for help with my financial situation, I knew when I walked through the front doors that I was in the right place. From the front office workers to the Attorney & his assistant, I was treated with care & respect. They helped take away the shame I felt for getting into the financial mess I was in and got me on the road to financial recovery. I never thought I would file for bankruptcy but now that it is behind me, I can say it was one of the best decisions I have made. THANK YOU to all the folks that make up Simon Fitzgerald, LLC!” — Paula Jeans
Free Resource: Louisiana Bankruptcy Eligibility Checklist
Are you unsure about your eligibility for bankruptcy in Louisiana? Download our free Bankruptcy Eligibility Checklist to assess your situation before speaking with an attorney. This comprehensive guide helps you understand:
– Which bankruptcy chapter might be right for your situation
– Documents you’ll need to gather
– How to calculate your income for the means test
– Common eligibility roadblocks and how to overcome them
What About Chapter 11 Bankruptcy?
While businesses primarily use Chapter 11 bankruptcy, it is also available to individuals with substantial debts or complicated financial situations. Unlike Chapter 7 and Chapter 13, Chapter 11 allows for debt restructuring while maintaining control over assets.
Who Can File for Chapter 11?
An individual in Louisiana may file for Chapter 11 bankruptcy if:
- They exceed Chapter 13 debt limits. If unsecured debts are above $465,275 or secured debts exceed $1,395,875 (as of 2024), Chapter 11 may be the only option.
- They want to retain control of assets. Chapter 11 allows debtors to keep property and restructure payments without forced liquidation.
- They have a complex financial portfolio. Business owners, real estate investors, or high-income individuals often use Chapter 11 to manage multiple debts.
- They need a flexible repayment plan. Unlike Chapter 13’s strict five-year repayment period, Chapter 11 plans can be longer and more tailored to financial needs.
When Should Someone Consider Chapter 11?
Filing for Chapter 11 in Louisiana may be necessary if:
- Chapter 7 would result in asset loss due to liquidation.
- Chapter 13 isn’t an option because debts exceed the legal limits.
- They need to restructure secured debts like mortgages or business loans.
- They have ongoing business operations and want to keep them running while reorganizing debt.
While less common for individuals, Chapter 11 can be a powerful tool for those with large debts, high-value assets, or complex financial obligations. Consulting a Louisiana bankruptcy attorney can help determine if this path is the right fit.
How Can Our Louisiana Bankruptcy Lawyers Help?
Filing for bankruptcy in the Western District of Louisiana is a major financial decision, and even small mistakes in determining your eligibility can lead to delays, loss of assets, or case dismissal. Simon Fitzgerald’s experienced Shreveport, Monroe, Alexandria, Lafayette, and Lake Charles bankruptcy lawyers will make sure your eligibility is properly assessed, and your case is handled correctly, helping you avoid common mistakes that unrepresented filers often make.
Reviewing Your Situation
An attorney begins by evaluating your financial situation and determining whether Chapter 7, Chapter 13, or Chapter 11 is the best option. Bankruptcy is not a universal solution, and selecting the incorrect chapter could result in payment difficulties or the inability to safeguard certain assets. They will explain the pros and cons of each option and help you decide whether bankruptcy is truly the best path or if alternatives like debt negotiation or loan modifications would be a better fit.
Helping You File
Filing for bankruptcy requires extensive paperwork, and errors can lead to rejection or unnecessary delays. A lawyer confirms that all required financial documents, including income reports, debt listings, and asset disclosures, are accurate and submitted on time.
It is important to note that Louisiana has specific bankruptcy exemptions that allow filers to keep certain property, like a home, vehicle, or retirement account. Without legal guidance, you may risk losing assets that could have been protected.
Supporting You After Filing
Once your case is filed, bankruptcy triggers an automatic stay, which immediately stops creditors from calling, sending collection notices, filing lawsuits, or garnishing wages. If a creditor violates this protection, an attorney can take legal action to enforce the stay.
In court, a bankruptcy lawyer represents you at hearings, including the 341 meeting of creditors, where creditors may ask questions about your financial situation. An attorney negotiates on your behalf to resolve disputes over your repayment plan in Chapter 13 or objections raised regarding certain debts.
Questions? Speak to a Louisiana Bankruptcy Lawyer Today
Are you considering bankruptcy as a viable option? At Simon Fitzgerald LLC, we focus exclusively on bankruptcy law and are here to guide you. If you need to eliminate unsecured debt, stop creditor harassment, or protect your assets, we’ll help you find the best solution for your situation. Call us today or fill out our online consultation form to take the first step toward a better financial future.
