Knight Law Firm | June 10, 2025 | Family Law
If you’re facing financial problems in Louisiana, you may consider filing for bankruptcy. There are two common types of personal bankruptcy: Chapter 7 and Chapter 13. They are different, and each has its own rules, benefits, and drawbacks. Knowing the differences can help you pick the right one.
In this blog post, we’ll review Chapter 7 and Chapter 13 bankruptcies in further detail and show how your choice might affect family law issues like divorce or child support.
What Is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is often called “liquidation” bankruptcy. It quickly eliminates most of your unsecured debts, like credit card balances or medical bills.
When you file for Chapter 7, a trustee checks your assets. They may sell some non-essential property to repay creditors. However, under Louisiana law, important belongings like your home, vehicle, and household items might be protected by exemptions.
To qualify for Chapter 7 bankruptcy in Louisiana, you must pass a “means test.” This test looks at your income and expenses to see if you genuinely cannot afford to repay debts. Chapter 7 usually finishes quickly, within four to six months.
Chapter 7 may be a good option if you have limited income, little valuable property, and heavy unsecured debts you cannot repay.
What Is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is known as a “repayment plan” bankruptcy. Rather than selling property, Chapter 13 sets up a plan for you to repay some or all your debts over three to five years. You make regular payments based on your income. After completing these payments, the remaining eligible debts are discharged.
People in Louisiana often choose Chapter 13 if they have steady income, specific property they want to protect, or debts that can’t be cleared in Chapter 7.
Chapter 13 also might be best for you if you earn regular income and want to keep important property while slowly repaying debts.
Key Differences Between Chapter 7 and Chapter 13 Bankruptcy
Here are the biggest differences between Chapter 7 and Chapter 13 bankruptcy:
- How debts are handled: Chapter 7 quickly eliminates most unsecured debts without repayment. Chapter 13 uses a repayment plan.
- Length of process: Chapter 7 is completed in a few months. Chapter 13 takes three to five years.
- Eligibility requirements: Both kinds usually require undergoing a means test. Chapter 13 requires regular income to afford repayment.
- Property protection: Chapter 7 may involve selling non-essential items, although many belongings are exempt. Chapter 13 lets you keep your property as long as you follow the payment plan.
Ultimately, if your income is low, your debts are high, and you have little property to protect, Chapter 7 could be your best choice. However, if you have regular income, certain kinds of valuable assets, or debts that can’t easily be discharged, Chapter 13 might work better for you.
How Bankruptcy Can Affect Family Law Matters in Louisiana
Bankruptcy doesn’t just affect finances; it can also impact family law issues such as divorce, child support, and property division.
For example, filing for Chapter 7 can quickly relieve debts, helping you become financially stable after divorce. However, it won’t erase obligations like child support or spousal support payments.
Chapter 13 bankruptcy can help you organize your finances to manage divorce-related debts. It also allows you to catch up on overdue child support or spousal support payments through a repayment plan.
Because bankruptcy intersects with family law, you should always talk to a lawyer who understands both areas.
Contact the Louisiana Bankruptcy and Family Law Attorney at Knight Law Firm for Help Today
If you’re thinking about bankruptcy in Louisiana and dealing with family law issues like divorce or child support, talking to an experienced lawyer can make all the difference. Our Monroe family lawyer at Knight Law Firm can explain how Chapter 7 or Chapter 13 could affect your family’s financial and legal future.
Contact us today to protect your finances and your family’s well-being.
We proudly serve Shreveport, Monroe, Ruston, and the surrounding areas of North Louisiana.
Knight Law Firm – Shreveport Office
401 Market Street Suite 1006, Shreveport LA 71101
(318) 323-2213
Knight Law Firm – Ruston Office
111 Kilgore Rd, Ruston, LA 71270, USA
