It is tax refund season and bankruptcy season. This is the time of the year when bills are coming due from Christmas and decisions have to be made regarding your refund. Bankruptcy is not the right solution for everyone, but if you have overwhelming debt, it may be a consideration. If you have financially struggled for several years, now may be the time to consider a change.
About half of the bankruptcy cases filed each year are done in the first four months. Tax refunds are a major reason. If you file a bankruptcy before you get your refund, the bankruptcy court will take the refund and apply it to your debts. This means they will give it to your creditors. An alternative is to use part of the refund to pay for a bankruptcy.
A bankruptcy can eliminate or restructure your debts. The most common types are Chapter 7 and Chapter 13. In a Chapter 7, you are asking for debt forgiveness in exchange for possibly giving up non-exempt assets. In a Chapter 13, you are restructuring your obligations and repaying a portion of the debt over a five-year period, with the payment amount based on income and a few other factors.
Changes to the exemption laws in Louisiana protect at least one vehicle for most families, household goods, and even firearms. The majority of Chapter 7 bankruptcy filers pay little or nothing to creditors. As mentioned above, there may be a buyback of your unsecured assets. Most of the larger ticket items, however, are protected. Retirement accounts, your home, and most of its contents are protected to some degree as well. Tools of the trade (items needed to earn a living) are almost totally protected.
The main exemption statute in Louisiana is 13:3881. It lists the exemptions a little more completely.
If you have overwhelming debt, call the Gouner Law Office to discuss your options at
(225) 293-6200 or Toll Free: (800) 404-1921.
Written by: Greg Gouner