Written by Attorney Jamie Lee Ruiz.
Updated August 17, 2020
Being in debt can be overwhelming. Especially when you live in a city as vibrant as New Orleans, Louisiana. The constant Mardi Gras culture is a call for celebration- crawfish, oysters, jazz & jambalaya! But, how can you enjoy the culture of your hometown while in debt? The good news is, you have options. Filing Chapter 7 bankruptcy in New Orleans can be the answer for you. If you have debts mostly from past due credit cards and medical bills that you can’t afford to pay any more, you may be a good candidate for Chapter 7 bankruptcy relief. Chapter 7 bankruptcy will help you discharge unsecured debts with the exception of student loans. It will also allow you to keep protect the property you own without having to surrender it to pay your debts. You also may have the option to file for Chapter 13 bankruptcy. Chapter 13 is reserved for those who make a certain income and are able to pay back some of their debts over a period of time.
Now, the mere thought of filing bankruptcy in New Orleans may be terrifying, but here’s the truth about bankruptcy many don’t realize:
It does not destroy your credit;
You can rebuild your credit after your discharge;
Bankruptcy is simply a mark on your credit report, it doesn’t bar you from building your credit;
Bankruptcy is a fresh start;
You can get help filing bankruptcy for free!
This guide will walk you through the process step by step and - if you diligently complete the process - you could be living debt free in approximately 4-6 months!
New Orleans Bankruptcy Lawyers - Estimated Cost
A bankruptcy lawyer is an investment and here's why it can be a good investment if you’re not sure your case is simple enough to do it on your own: Bankruptcy lawyers are well-versed in bankruptcy law and will walk you through your New Orleans bankruptcy step-by-step. Further, bankruptcy lawyers have experience appearing before the Trustees and judges in your area. They understand the complexities of the Means Test, as well as the other bankruptcy forms. A New Orleans bankruptcy lawyer costs anywhere between $1,450-$1,800. This fee typically includes a free initial consultation, completion of all the bankruptcy forms, representation at the 341 meeting, and seeing the conclusion of your case to discharge. The free consultation (the first meeting with your attorney) is where you will go over your financial situation and ask any questions about the bankruptcy process. Some questions you may consider asking are:
How long the process takes?
Am I a good candidate for Chapter 7? Or would another chapter under the Bankruptcy Code better suit my goals?
Will you be able to keep some or all of your property (if not, what you will have to give up)?
What their fee covers and what it does not?
The bankruptcy attorney will ask you about your income, expenses, and property you own among other items. This is your opportunity to "interview" the attorney and see if they are the right fit for you. Don't forget that you can absolutely do this on your own or receive free help from Upsolve, but it can’t hurt to know your options and meet with a couple of local bankruptcy lawyers to find out whether hiring one of them may make sense for your case.
How to File Bankruptcy in New Orleans, Louisiana for Free
When filing bankruptcy in New Orleans you will have to gather some essential documents to help you fill out the bankruptcy forms. Once you have completed your forms, you will submit them to the Court along with your filing fee and get your case on the Court's docket. Keep reading to learn more about how to file bankruptcy in New Orleans without a lawyer (“pro se”).
Collect Your New Orleans Bankruptcy Documents
The documents that are most helpful to fill out your New Orleans bankruptcy forms are your pay stubs, tax returns, bank statements, and monthly bills. In the electronic age, it’s very likely that you don’t receive pay stubs by in physical form anymore. If that’s the case, and you haven’t really kept track of them in your email inbox, ask your HR representative or payroll department at your job to help you find your pay stubs online. Once you do, it is helpful to save them, and later print a copy for yourself and the Trustee. If you don’t have your tax returns, they can be accessed online or requested by mail by following the instructions on the IRS website. Your monthly bills and a recent copy of your credit report will come in handy when you are filling out the creditor matrix (a form you will need to submit to the Court when filing bankruptcy in New Orleans).
Take Credit Counseling
The credit counseling course is an educational course you’ll have to take before filing bankruptcy in New Orleans. The law requires that you take this course in the 180 days before you file for bankruptcy protection. The credit counseling course is a course that will discuss the different options to deal with your debt. The course you take must be approved by the United States Trustee's office. You can find an approved course for you Louisiana bankruptcy on the U.S. Trustee's website in your area. You can take the course online, by telephone, or in person. The nearest in person course is offered by Money Management International, Inc. located at 1215 Prytania Street Suite 336 in New Orleans. The course lasts approximately one hour. Upon completion of the course you will receive a certificate that you will submit to the Court along with the rest of your bankruptcy forms.
Complete the Bankruptcy Forms
The New Orleans bankruptcy forms, when completed, will paint a full and accurate picture of your financial situation. The forms will ask you about how much money you make, how much money you spend, how much money you owe, and what property (assets) you own. These forms will give the Court an idea of how your debt has affected your financial health. The easiest way to prepare for filling out the forms is to gather your bankruptcy documents discussed earlier. They will help you fill out the bankruptcy forms and prevent you from having to look for crucial information while filling out the forms. Once you have gathered all your materials, you can locate all the forms for free online. All forms are in fillable PDF format so that you may complete them at your own pace. The most common mistake in filling out the bankruptcy forms is leaving pertinent information out. Consider doing a rough draft of your forms before submitting them to the Court to prevent this from happening and help ensure a smooth processing of your Chapter 7 bankruptcy in New Orleans.
Get Your Filing Fee
The filing fee for an individual or spouses filing a Chapter 7 bankruptcy in New Orleans together is $335. Although this may seem like a lot of money, it’s how you will get your case in front of the Court. If you need some help with the filing fee you have two options: a fee waiver or an installment plan. Both applications are submitted to the Court with your bankruptcy forms and reviewed by a judge who will either grant or deny your application. The application will ask you for information you've already supplied in Schedules I and J, asking you about your income and expenses. If your fee waiver application is granted, you will not have to pay the filing fee for your Louisiana bankruptcy. If the judge denies your fee waiver application, the judge may propose an installment plan so you can make the payments over time. If you are making payments in installments, you will be making four monthly payments of no less than $83.75 until the fee is paid in full.
Print Your Bankruptcy Forms
Once you have completed and reviewed your New Orleans bankruptcy forms, you are ready to print them and submit them to the Court. You can print them at home or if you don’t have a printer, you can utilize the available resources in your local library to print. Everything you need for filing bankruptcy in New Orleans. Often times your local library will charge a minimal fee for printing. The nearest local libraries are located at:
Main Library, 219 Loyola Avenue, New Orleans;
Algiers Regional Library, 3014 Holiday Drive, New Orleans;
Alvar Library, 913 Alvar Street, New Orleans
You will need to print out at least two versions of your forms. Keep in mind your forms must be printed single-sided.
Go to Court to File Your Forms
If you live in the Big Easy, you will file your New Orleans bankruptcy forms at the courthouse located at 500 Poydras Street, Suite B-60, New Orleans. You will file your forms with the bankruptcy clerk. Before going to Court keep in mind a few things. First, the courthouse is a federal building and you will have to go through metal detectors when you enter. You must also have a valid photo ID. Second, you will not be able to bring your cell phone in the building. Cell phones are checked at security and returned to you when you leave. Third, you may want to bring cash with you in the event that you will have to pay for parking. Keep in mind that the court is open from 8:30 AM - 4:30 PM (Monday through Friday) and closed on federal holidays and weekends. It’s better to file your forms in person. This way the clerk can review them for any missing forms and signatures, preventing you from having to make a trip back or mail in the missing forms. You should dress business casual when visiting the Court.
Mail Documents to Your Trustee
Once you have filed your New Orleans bankruptcy, a Chapter 7 Trustee will be assigned to review your bankruptcy forms. It’s the Trustee's job to make sure you have filled out your forms truthfully and accurately. It is also the Trustee's responsibility to recover any money you have recently paid (voluntarily or not) to those you owe, sell any unprotected property to pay debts, and ensure that there has been no bankruptcy fraud. You will meet with your Trustee at your 341 meeting. Before this meeting, you’ll need to send your Trustee your pay stubs, income tax returns, and bank statements. It’s best to check the US Trustee website to confirm your Trustee's contact information and how they prefer to receive forms (mail, fax, or email). The Trustee needs these documents to verify the information in your bankruptcy forms. It is best to get the Trustee all your documents at least 7 days prior to your 341 meeting, so that they may have time to review them.
Take Bankruptcy Course 2
Like you did before filing bankruptcy in New Orleans, you will need to take a course after you file for bankruptcy – the financial management course. The financial management course will give you the tools you need to start and maintain healthy financial habits after filing bankruptcy in New Orleans. Like the credit counseling course, you may only take a course approved by the United States Trustee's office. There are no in-person courses being offered in New Orleans but can take the course online or by telephone. Once you have completed the course, you will receive a certificate of completion, which you will have to submit to the Court.
Attend Your 341 Meeting
The 341 meeting is typically the only Court appearance and face to face interaction with the Trustee you’ll have in your Chapter 7 bankruptcy in New Orleans. The purpose of this meeting is to go over any questions the Trustee may have on your bankruptcy forms. This also gives the people you owe an opportunity to ask you questions about your debts, though that rarely happens. You can expect the meeting to last between 10 to 15 minutes depending on the number of questions the Trustee has and whether any creditors show up. The meeting will take place at the same courthouse where you filed your Louisiana bankruptcy case. You should bring your driver's license and original social security card to your meeting. It’s best to dress business casual and to avoid any flashy jewelry or accessories.
Dealing with Your Car
Dealing with your car in your New Orleans bankruptcy can be the most important part of the process to some. Depending upon whether you have a loan or lease will dictate your options. You will also need to consider other options if you own your car. In that case, you will be able to keep it if you can protect its full value (or equity if you’re still making payments) using exemptions. You may also redeem your car, which means that you will buy your car out for its value and discharge the rest of the loan balance. You can also sign a reaffirmation agreement with your lender, which will enable you to keep making payments on the car with the condition that if you miss a payment, the lender can repossess your car and collect any deficiency from you. In some cases it may be more favorable to surrender your car; this makes sense if you owe more money than the car is worth. All in all, there are several options to protect your car if it’s an essential part of your daily life in the Big Easy.
Louisiana Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for New Orleans
Louisiana Means Test
Some think that the Louisiana Bankruptcy Means Test is the most challenging of all the New Orleans bankruptcy forms. The Means Test is a way for the Bankruptcy Courts to monitor and prevent the abuse of the bankruptcy system. The test will measure your income against your expenses and debts. It does so by comparing your income to the state median income for your family size. If your income is above the state median income for your family size, there is what's called a presumption of abuse. To disprove the presumption of abuse, you’ll need to explain why you can’t pay back your debts or show that you fall into an exception and don’t have to complete the means test.
Median Income Levels for Louisiana
Louisiana Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
|Household Size||Monthly Income||Annual Income|
Poverty Levels for Louisiana
Louisiana Fee Waiver Eligibility for Cases Filed On or After May 1, 2020
Eligible for fee waiver when under 150% the poverty level.
|Household Size||State Poverty Level||Fee Waiver Limit (150% PL)|
Louisiana Bankruptcy Forms
Out of the entire bankruptcy process, preparing for and filling out the New Orleans bankruptcy forms can be the most time consuming. For ease of reference you can find all the bankruptcy forms for free, online. The hardest part is being inclusive. For example, in Schedule A/B, you will list all your property. A helpful tip would be to do a walk through of your house, shed, and storage facility and make your own list of property (big or small) so you don't forget anything. Remember, inclusivity is key and full disclosure the only option when filing bankruptcy in New Orleans.
Simply put, the Louisiana bankruptcy exemptions help protect your stuff. Your home, and car, your favorite couch, your clothes and similar items can generally be protected by exemptions. In some states, you can use federal bankruptcy exemptions, however, Louisiana does not allow that. Here, you must use state exemptions to protect your property. The exemptions allow people to live with dignity before, during and after the bankruptcy process. The exemptions are for your benefit and should be a large part of your pre-New Orleans bankruptcy planning.