Eliminate debt through Chapter 13 bankruptcy and manage dischargeable debt 

In today’s modern era, dealing with financial challenges can be stressful. If you are burdened by increasing debts and relentless creditor demands for repayment, you might have come across Chapter 13 bankruptcy as a possible way out. Managing Chapter 13 dischargeable debt in Louisiana can be difficult, so getting assistance from our law firm, E. Orum Young Law, will ensure you achieve financial recovery. Our bankruptcy attorneys in Monroe, LA, are ready to help.  

What is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy, also called a ‘wage earner’s plan,’ is a particular bankruptcy option created to assist individuals or families with steady income in taking charge of their finances. It involves repaying debts gradually over a planned period. This legal avenue is accessible to Monroe, LA, and all of Louisiana’s residents, offering benefits such as halting foreclosure, averting repossession, and handling burdensome debt effectively.

What Constitutes a Dischargeable Debt?

Before we further explore Chapter 13 dischargeable debt in Louisiana, let us clarify the term ‘dischargeable debt’ in the context of bankruptcy. Dischargeable debt refers to the portion of your debts that can be erased or ‘discharged’ through bankruptcy. The objective is to craft a manageable repayment plan while discharging specific types of debts upon a successful plan completion in Chapter 13 bankruptcy.

Common examples of dischargeable debts in a Louisiana Chapter 13 bankruptcy encompass credit card debt, medical bills, personal loans, and utility bills. It is crucial to understand that not all debts fall into this category. Debts that cannot be discharged include student loans, child support, alimony, and specific tax debts.

What are the Debts Covered by Chapter 13 Bankruptcy?

The specific debts that could be eliminated through bankruptcy depend on the type of bankruptcy you choose (Chapter 7, Chapter 13, etc.) and the laws applicable in your area. Nonetheless, several common examples of debts typically considered dischargeable include:

  • Credit Card Debt: Debts from unsecured credit cards, which are not backed by collateral, are typically dischargeable in bankruptcy.
  • Medical Bills: Expenses related to medical care, aside from hospital bills and doctor’s fees, are typically eligible for discharge.
  • Personal Loans: Debts from personal loans, including loans from family members or friends, are generally dischargeable.
  • Utility Bills: Overdue utility bills like electricity, water, and gas bills can often be discharged through bankruptcy.
  • Collection Accounts: Debts sent to collections, such as unpaid bills that collection agencies have acquired, may qualify for discharge.
  • Lease and Rental Arrears: Past-due payments for leases and rentals, such as those for apartments or equipment, may sometimes be discharged.
  • Judgment Liens: Specific types of judgment liens, particularly those associated with unsecured debts, might meet the criteria for discharge.

Consulting with our bankruptcy attorney is crucial to determine which debts are dischargeable based on your specific situation and the applicable bankruptcy laws in your jurisdiction.

What is Not Covered by Chapter 13 as a Dischargeable Debt?

Remember that bankruptcy does not eliminate all debts. Some common categories of non-dischargeable debts include:

  • Student Loans: Most student loan debts cannot be discharged unless you can prove ‘undue hardship,’ a challenging legal standard to meet.
  • Child Support and Alimony: Court-ordered child support and alimony payments are usually non-dischargeable.
  • Certain Tax Debts: Although some tax debts might be dischargeable, recent income tax debts are generally not dischargeable.
  • Debts from Fraud or Misrepresentation: Debts incurred through fraudulent activities, pretenses, or deceit are typically non-dischargeable.
  • Criminal Restitution: Debts related to restitution orders in criminal cases are usually not eligible for discharge.
  • Debts Arising from Personal Injury or Death Due to Drunk Driving: Debts resulting from injuries or fatalities caused by drunk driving are often not dischargeable.
  • Debts Not Listed in Bankruptcy Filings: If you fail to include a debt in your bankruptcy paperwork, it may not be discharged as part of the bankruptcy process.

How Can I be Eligible for Chapter 13 Bankruptcy?

 Certain criteria must be met to qualify for Chapter 13 bankruptcy, including:

  • Steady Income: You need a consistent income source that covers living expenses and enables payments under the Chapter 13 plan. This income can be from employment, self-employment, Social Security, or other reliable sources.
  • Debt Limits: There are debt limits for Chapter 13 bankruptcy. As of 2023, the combined limit of an individual’s combined total secured and unsecured debts is less than $2,750,000. These limits are adjusted periodically to account for inflation, so verifying the current limits with your bankruptcy attorney or the bankruptcy court is essential.
  • No Recent Chapter 13 Discharge: If you obtained a Chapter 13 discharge in the last two years, you generally cannot file another Chapter 13 case. If you previously filed for Chapter 7, a four-year waiting period applies before filing for Chapter 13.
  • Credit Counseling: Completion of credit counseling from an approved agency is mandatory before filing. You have to submit a completion certificate with your bankruptcy petition.
  • Adequate Disposable Income: Chapter 13 eligibility hinges on having enough disposable income to fund your proposed repayment plan. That is your income after covering essential living expenses, used for creditor payments during the plan.
  • Tax Filings: You must have filed federal and state income tax returns for the previous four years before filing for Chapter 13. Catch up on overdue tax filings if necessary.
  • Intent to Repay: You should intend and have the ability to make regular payments as outlined in your proposed Chapter 13 repayment plan, typically lasting three to five years.
  • Secured Debt Arrears: If you are behind on secured debts like mortgages or car loans, your plan must include a strategy to catch up on these arrears over the Chapter 13 plan’s duration.
  • Good Faith: Filing for Chapter 13 must be in good faith, meaning you are not misusing the system or attempting to defraud creditors.

How Our Experienced Bankruptcy Attorney Can Assist You

While the idea of Chapter 13 dischargeable debt in Louisiana may appear straightforward, the legal process can be intricate as there are numerous subtleties to consider. That is where the skills of our experienced bankruptcy lawyer become indispensable.

  • Assessing Eligibility: Our attorney will initiate the process by evaluating your eligibility for Chapter 13 bankruptcy under Louisiana’s specific regulations. This assessment involves a comprehensive review of your financial situation, income, and debts to determine if it aligns with this path.
  • Creating a Tailored Repayment Plan: Once eligibility is confirmed, our lawyer will collaborate to craft a customized repayment plan that aligns with your unique financial circumstances. This plan will outline the approach for repaying creditors over a period typically spanning three to five years.
  • Protection from Creditors: Filing for Chapter 13 bankruptcy triggers an automatic stay, requiring creditors to stop collection efforts immediately, including foreclosure and repossession actions. Our attorney will ensure this legal stay is enforced and safeguard your rights throughout the process.
  • Navigating Legal Procedures: Bankruptcy entails various legal proceedings, paperwork, and court appearances. Our experienced attorney will guide you to ensure all aspects are handled accurately and in your best interest.
  • Securing Debt Discharge: Our lawyer will assist in identifying which of your debts are dischargeable and will work diligently to maximize the benefits of bankruptcy for you. We will ensure that all eligible debts are included in your repayment plan and discharged after its successful completion.
  • Avoiding Common Pitfalls: Navigating Chapter 13 bankruptcy yourself can lead to common errors. Having our knowledgeable attorney by your side can help you sidestep these pitfalls, contributing to a smoother path toward financial recovery.

Work With Our Bankruptcy Law Firm Serving Monroe, LA

Managing a Chapter 13 dischargeable debt in Louisiana can provide much-needed relief for individuals and families facing overwhelming financial burdens. However, to navigate this process effectively and secure maximum debt relief, the guidance of our skilled attorney is essential.

If you are contemplating Chapter 13 bankruptcy, whether in Monroe, LA, or anywhere in Louisiana, we encourage you to connect with E. Orum Young Law. Our law firm has a proven track record of assisting clients in regaining financial stability. With our proficiency and unwavering commitment, you can confidently set a course toward a brighter financial future, free from debt. Do not allow financial hardship to hinder your progress—get a free case review today and take the first step toward a debt-free future you rightfully deserve.