Written by Attorney Karra Kingston.
Updated July 28, 2019
If creditors are harassing you and you are unable to pay your bills, you may be wondering if you should file a Louisiana bankruptcy. Filing a Chapter 7 bankruptcy can help you get out of debt. In order to qualify for a Chapter 7 bankruptcy, you have to pass the bankruptcy Means Test in Louisiana. The Means Test was added in 2005 when Congress revised the Bankruptcy Code and it’s intended to stop people who can afford to pay their debts from filing a Chapter 7 bankruptcy.The bankruptcy Means Test in Louisiana sets parameters around who is allowed to file for a Chapter 7 bankruptcy by allowing only people who are below a certain income to do so. First, you can immediately qualify for a Chapter 7 bankruptcy based on the income limits. If you earn less than the median household income for a family of the same size in Louisiana, you pass the Chapter 7 Means Test. If your income is above the allowable amount, then there is a “presumption of abuse” and you have to go through the second part of the Chapter 7 Means Test, which compares your monthly income with your monthly expenses. If, after going through the full calculation, you find little or no disposable income remaining, you are qualified to file your Louisiana bankruptcy as a Chapter 7 case.
Louisiana Median Income Levels
Louisiana Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
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Discharge in Bankruptcy for Louisiana
When you file for a Chapter 7 bankruptcy your goal is to complete the case by getting a discharge. A discharge is an order issued by the Bankruptcy Court that says you no longer have to pay back your debts and allowing you to walk away from most (or all) of your debt and get a fresh start. In order to successfully get a Louisiana bankruptcy discharge, you need to make certain that you are honest on your bankruptcy forms and are not hiding any assets. In order to complete a Louisiana bankruptcy, you must also complete two credit counseling courses, file all of your paperwork, and attend a Meeting of Creditors with the trustee assigned to your case. Once all of these steps have been completed, you will receive the notice of discharge approximately 60 days after your Meeting of Creditors has concluded. It’s important to note that a discharge is not the same as your bankruptcy case closing. Usually, your bankruptcy case will close a short time after your discharge notice is issued. A Louisiana bankruptcy discharge is not guaranteed in every case and Bankruptcy Courts can deny a discharge for many reasons. Therefore, it’s important that you qualify under the Chapter 7 Means Test and are honest, so you receive your Louisiana bankruptcy discharge without any complications.
Louisiana Means Test Calculator
In order to determine if you qualify for a to file your Louisiana bankruptcy as a Chapter 7 case, it is vital that you are using an appropriate Louisiana Means Test calculator. If you do a simple online search, you will find many online Means Test calculators. Many of these calculators are not kept up-to-date, which can be a problem when trying to qualify. At Upsolve we keep our Louisiana Means Test calculators current to the day, every day. Means test numbers change every few months, so it’s important to see when the online calculator you are thinking of using was last updated. Beyond keeping the Chapter 7 Means Test calculator up-to-date, Upsolve can help you with the bankruptcy process for free. Upsolve is a nonprofit organization that can help ensure that you complete every step of the Louisiana bankruptcy process and are able to get your debts discharged.
What Happens If I Fail The Means Test for Louisiana?
If you do not pass the bankruptcy Means Test in Louisiana, either based on the income limits or after the full Means Test calculation, take a moment to see that you did not make any mistakes while calculating your income. Even a slight mistake can have a huge impact on whether you pass the Chapter 7 means test. You should also go over all of your monthly expenses to make sure you didn’t miss anything. It’s important to be exact when calculating your monthly expenses so that your figures are accurate. If you find there are no mistakes after reviewing everything, you may want to see if your situation may change in a way that will allow you to qualify in the near future. The bankruptcy Means Test in Louisiana averages your last six months of income to determine if you qualify for a Chapter 7 bankruptcy. Therefore, if your income varies and you just got done with your busy season, it may be better to wait to file until after work is less busy and your paycheck smaller as a result. If you are in the process of a separation or divorce, you might both individually qualify for a Chapter 7 case with your own households even though you do not qualify together. If you are facing a possible layoff or will be working less overtime in the future, you may qualify later on. If you are a seasonal employee, it may be best to wait until your off-season when you are not receiving any income. If none of the above scenarios are in your future, then you should consider meeting with a bankruptcy lawyer. A bankruptcy lawyer can help you go over your expenses to make sure that you have not missed anything. Many bankruptcy lawyers will give you a free consultation so just sitting with them and having them review your case can be beneficial. If you still do not qualify then you may have to file a Chapter 13.