The decision to file bankruptcy is never easy, but many people find it the best option for their circumstances.
Bankruptcy can be a tool for financial recovery and a path forward out of debt-related stress. To utilize this process to your benefit, you need to know how to get started and what to expect.
Determine the type
Chapter 7 and Chapter 13 are the two most common types of bankruptcy for individuals. To determine which one you qualify for in Louisiana, you may be subject to a means test. However, if your income is below the state’s median based on the size of your household, then you will usually qualify for Chapter 7, which does not include a repayment plan. If you can repay your debts, you will most likely file for Chapter 13.
Both of these options come with their own pros and cons, it’s important to discuss which is right for your situation with an experienced bankruptcy attorney.
Start the process
Gather all the documentation you will need to prove your income, assets and debts. Things like real estate deeds, paycheck stubs, bank account statements and tax returns will be helpful. After gathering relevant information, you will need to file a petition with your district’s bankruptcy court and pay the filing fee. For those filing Chapter 13, you must also include a repayment plan. An automatic stay will go into effect upon filing, which prevents creditors from contacting you. You will then attend a meeting with the trustee (that your creditors may attend) and a Chapter 13 plan confirmation, if applicable.
Consider filing bankruptcy as a fresh start and a way to recover from financial hardships.