The new bankruptcy laws passed in 2005 could not have come at a worse time for Louisiana. With thousands homeless and jobless in the wake of Katrina, it was now more difficult for people to get immediate financial relief through bankruptcy. Fortunately, Congress did in fact pass provisions that provided a limited but needed grace period for debtors along the Gulf Coast. Still, with the new laws in effect, debtors who earn more than the median income in their state are obligated to pass the bankruptcy means exam in order to qualify for Chapter 7. Chapter 7 bankruptcy is widely preferred to its counterpart, Chapter 13, for a wide variety of reasons. People who are filing tend to prefer Chapter 7 since it is total debt elimination in most cases, meaning the consumer may not have to pay a dime (besides debt attorney fees & court costs) to satisfy the debt. Chapter 13, on the other hand, involves being put on a three to five year payment plan until the debt is discharged.

The following is the median income information for Louisiana as of 2006:

2-person families: 41,500
3-person families: 50,785
4-person families: 60,161
5-person families: 55,522
6-person families: 49,575
7-or-more-person families: 54,095

Due to the bankruptcy changes, more consumers from Louisiana have found alternatives to filing to be more suitable debt reduction solutions. If you would prefer to learn about options that can save you thousands while reducing the impact to your long-term credit, simply fill out a form today!

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Louisiana Bankruptcy Laws
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Bankruptcy Figures in Louisiana

2004: 29,201
2005: 36,024
2006: 10,750

Despite the horrific aftermath of Hurricane Katrina, the number of bankruptcy filings in Louisiana dropped significantly in 2006. The biggest factor behind this precipitous decline was the passing and implementation of the Bankruptcy Abuse Prevention and Consumer Protection Act in late 2005. In total, personal bankruptcy filings dropped by 25,274, or 70%. Fortunately, however, more consumers have found debt relief through the help of third party debt reduction companies.