Harsh life circumstances may render you unable to pay debts and maintain your financial stability. Losing a job, facing high medical expenses and supporting loved ones are just a few factors. Increasing debt can make it difficult for average people or businesses to recover their finances.
If you are facing overwhelming debt and an inability to pay, bankruptcy relief may be available to you. For those facing looming financial difficulties, a concern is: Can filing for bankruptcy leave me homeless?
What happens when you file for bankruptcy
Bankruptcy is a legal process that allows you to eliminate or repay debts with federal protections. The US designed the process to provide financial relief and help debtors find footing and bounce back from a crisis.
You must first fulfill criteria to file for either Chapter 7 or Chapter 13 bankruptcy. Bankruptcy eligibility depends on your income and debt level. A court oversees payment plans and liquidation of assets to ease debt. Bankruptcy may help you explore the best legal options for repaying your financial obligations.
Is my home in danger of bankruptcy risks?
Some may hesitate to file for bankruptcy in fear of having to liquidate their home and other important assets. Federal law mostly dictates bankruptcy cases regarding rules and requirements. However, because Louisiana has “opted out” of federal exemptions, filers must use Louisiana state exemptions to protect their property.
Exemptions are assets or property that you are allowed to keep in bankruptcy. In Louisiana, exemptions can protect your property from creditors. State law can shield $35,000 of home equity. Your home must be a primary residence and fulfill home area eligibility requirements.
How to file for bankruptcy
Under current bankruptcy laws, a court will examine your income and expenses to determine whether you qualify for Chapter 7 bankruptcy or if you need to file for Chapter 13.
You begin filing for bankruptcy when you gather financial information such as your sources of income and major financial transactions. You will also need to list all your current assets, ongoing debts, monthly expenses and more. Bankruptcy forms may require you to describe your financial situation in detail.
It is advisable to reach out for assistance before filing your petition. A legal professional with knowledge on debts can assist you in navigating the complex legalities of bankruptcy.