I Live in Louisiana. How Do I Know If I Can File A Chapter 7 Bankruptcy?

by Kevin Gipson, New Orleans Bankruptcy Attorney

June 13, 2007

Louisiana Sign

Usually the first question that I receive from a prospective client who is considering bankruptcy is whether he qualifies to file a Chapter 7 Bankruptcy. The answer to this question primarily depends upon the debtor’s income.

Often referred to as a “Fresh Start Bankruptcy”, a Chapter 7 bankruptcy permits a debtor to wipe the slate clean of his unsecured debts and get a “fresh start”. One thing to look at to see if you can file under Chapter 7 is whether your income is below your state’s “median income.”

The median income test is an obstacle placed in the path of a potential debtor by the credit card industry and its lobbyists. If the debtor makes less than his state’s median income, then, generally speaking, he can file for Chapter 7 bankruptcy. If the debtor makes more than his state’s median income, then further inquiry must be made to find out if he can still qualify.

In Louisiana, the median income is as follows:

One Person: $33,001.00/year $2,750.00/month

Two Persons: $40,565.00/year $3,380.00/month

Three Persons: $48,596.00/year $4,050.00/month

Four Persons: $57,752.00/year $4,813.00/month

For each additional person in the household an additional $6,300.00 per year is added.

So what this means is if you are a single individual and make less than $33,001.00 then you will probably qualify to file under Chapter 7 without there being a presumption that you as a potential debtor are trying to abuse the bankruptcy process.

But what happens if you make more than your state’s median income? Do you have to file for Chapter 13?

Well, the answer is that all is not lost!

A further inquiry must be made to see if you would still qualify based upon other financial factors. A skilled consumer bankruptcy attorney such as those members of the
Bankruptcy Law Network can guide you through this often complex issue
of median income.

For an excellent in depth article on median income consider reading “Do I Qualify For Bankruptcy, Median Income Part 2 of 9″ by attorney and Bankruptcy Law Network contributor, Andy Miofsky.

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I've been a consumer bankruptcy lawyer for nearly 25 years. Since that time I have helped many people resolve their financial problems. I have been practicing law since 1986 and I am licensed to practice in all state and federal courts in the State of Louisiana. Because I am a sole practitioner, you know that your debt matters are being handled by me personally. In addition to my work with consumers, I am also frequently asked to speak at local seminars on bankruptcy law. I am member of the following organizations: • Louisiana Bar Association • National Association of Consumer Bankruptcy Attorneys • Bankruptcy Law Network My office is located at: 3920 General DeGaulle Drive, New Orleans, LA 70114 Telephone: (504) 368-4101

Last modified: February 23, 2013