Chapter 13 Bankruptcy Laws & Strikes in Louisiana

• Notify your attorney if you foresee missing a Chapter 13 plan payment. Jupiterimages/Comstock/Getty Images

  If a debtor has defaulted on his bills in the state of Louisiana and needs help to become current, he should consider filing for Chapter 13 bankruptcy. Under Chapter 13 bankruptcy, the debtor pays his debts off in a debt repayment plan and keeps all property, as long as he pays for that property under the plan. If the debtor foresees that he may miss a payment, he should notify his attorney.

Chapter 13

• When a debtor files a Chapter 13 bankruptcy petition, an automatic stay goes into place. At that point, all of the debtor's creditors must stop attempts to collect on debts. Phone calls, letters and any court actions must cease. The U.S. Trustee appoints a bankruptcy trustee to oversee the debtor's case. The bankruptcy trustee receives the debtor's bankruptcy filings and conducts the first meeting of creditors where he will ask the debtor to answer questions, under oath, pertaining to his bankruptcy case. The debtor must propose a debt repayment plan to the bankruptcy court handling his case. Only the bankruptcy court can approve the plan. The debt repayment plan will last for three or five years.

Median Incomes

• The debtor's family income as compared to the median family income for a family of the same size in Louisiana will determine the length of the debtor's Chapter 13 debt repayment plan. As of 2010, the Census Bureau listed Louisiana's median family incomes as $37,331 for a single earner; $48,115 for a family of two; $53,271 for a family of three; and $66,020 for a family of four. Add $7,500 for each family member in excess of four. If the debtor's family income falls below the state median family income, his debt repayment plan will last for three years. If the debtor's family income hovers above the state median family income, his debt repayment plan will last for five years.

Strikes

• After the debt repayment plan has been confirmed, the debtor needs to begin making monthly payments to the bankruptcy trustee. The bankruptcy trustee also has the task of distributing payment to each of the debtor's creditors. The point of the debt repayment plan is for the debtor to make all payments on time each month. A Chapter 13 bankruptcy case does not play out like a game of baseball. A debtor does not get to accrue three strikes before being thrown out of the game. It only takes one strike, one missed plan payment for the debtor's case to be thrown out of court. The bankruptcy trustee cannot allow a debtor to miss a plan payment, so if a payment is missed, the trustee must alert the bankruptcy judge. If a debtor foresees that he will miss a payment, he should contact his bankruptcy attorney immediately. The bankruptcy attorney can advocate for the debtor and ask the bankruptcy judge to change the requirements of the debtor's repayment plan.