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Louisiana Legal Blog

How to know when bankruptcy is a good option

Filing for bankruptcy in Louisiana can have a significant impact on one's credit score. It can also affect a person's ability to get a loan in the future. Bankruptcies will stay on a credit report for up to 10 years, but lenders can ask borrowers to disclose a bankruptcy regardless of when it happened. There are alternatives to bankruptcy for those who are struggling to repay their debts.

For example, it may be possible to negotiate a debt settlement after missing one or more payments. Creditors generally prefer to get some of their money as opposed to potentially getting nothing in a bankruptcy case. Prior to filing for bankruptcy, an individual will need to go through a credit counseling course. Therefore, it may be a good idea to seek credit counseling voluntarily as a possible means of getting on track financially.

How to deal with personal debt

For many people in Louisiana, credit card bills are on the rise. This reflects a national trend: In the first three months of 2018 alone, household debt grew by $63 billion across the country. This marked the 15th consecutive quarter of growth in the nation's personal debt burden. Americans collectively owe $13.21 trillion in household and personal debt, including $815 billion in credit card bills and $1.23 trillion in outstanding auto loans.

Debt has become a way of life for Americans, and it can be difficult to find a way out. In the first place, people who are in debt need to understand exactly what they owe. They should list their debts, including the creditors, interest rates and monthly payments. In addition, people are entitled to a free annual credit report from each of the major credit bureaus. By reviewing their credit report, they can gain a complete listing of creditors as well as note any mistakes to petition for their removal.

Women may struggle with higher debt loads

Women in Louisiana may be at particular risk for a crippling burden of debt. The gender wage gap has been widely debated as a significant political and social issue. Some studies indicate that on average, women earn 72 to 82 cents for every dollar earned by men. At the same time, however, the gap is not only reflected in income but also in comparative levels of debt. Many more women have larger amounts of debt than their male counterparts. For example, women owe an average of $6,000 more on their student loans and almost $2,000 more on their auto loans.

Credit card debt also reflects a gender gap: Women owe about $1,500 more on average then do men while they also have around $1,100 greater medical debt than men. While some of these obligations reflect the different choices made by women with regard to spending and borrowing, in many cases they reflect a lower ability to repay the debt. Ongoing lower incomes over the years can cause women to fall behind in paying back their debt.

Credit card offers can lead to debt

When people in Louisiana sign up for a rewards credit card, they may not realize how easy it can be to wind up with an insurmountable amount of credit card debt. When people receive a signup bonus or other incentives to start using a new card, it can be easy to choose what appears to be a great deal. However, when early promotional periods come to an end and interest starts to rack up, people may find themselves in trouble, facing late payment charges and seemingly endless collection calls.

One issue that can arise for credit card holders is the appeal of some promotional rewards. Many credit cards offer different types of travel promotions. In some cases, people receive miles when opening a card; they may be able to buy tickets with more miles than they have in the account with later purchases credited toward the existing tickets. However, if people don't buy enough to make up the mileage gaps, they will need to buy the miles from the credit card or airline. Sometimes, the cost of these miles can be as much as or more than buying a regular ticket.

Which will benefit you more: Chapter 7 or 13

Filing for bankruptcy can prove beneficial if you find that debt has overwhelmed you. But how do you know which type to file for: Chapter 7 or Chapter 13?

If you are considering filing for bankruptcy, you are not alone. According to United States Courts bankruptcy filings, Louisiana has one of the highest rates of bankruptcy. What are the benefits of Chapter 7 and Chapter 13?

Women struggle with mounting credit card bills

Louisiana women with mounting credit card debt are not alone in their struggles. Even though Americans of all genders are widespread users of credit cards, more women credit card holders are concerned about their ability to repay their mounting debt burdens. Across the country, credit card debt is at the second-highest point it has been since 2008, when a major financial crisis shook the American economy. Indeed, in one quarter in 2018, Americans accumulated $30 billion in personal consumer debt.

A recent study noted that 26 percent of women said that they were not confident they could repay their bills in full that month. On the other hand, 14 percent of men shared the same concern. Women make 80 percent of what men do on average, meaning that most women have to work more hours in order to escape their debt burdens. This is reflected in payoff rates; while one-fifth of men said that they had been able to pay off their bills once or not at all in the past six months, almost one-third of women said the same.

Credit cards can help build credit when used wisely

Credit cards provide Louisiana residents with a straightforward and convenient way to borrow, but interest charges and fees can mount quickly if revolving balances are not paid in a timely manner. Using them wisely can also help to build credit, and the rewards programs that many lenders have in place give consumers more reasons to charge their purchases.

Some credit card companies reward spending with points that can be used to redeem merchandise, but the most popular loyalty programs offer cash back or discounted airline tickets. However, financial experts warn consumers not to let these perks lure them into the credit card debt trap. The consumer credit reporting agencies also encourage credit card use as credit scores fall when unused cards are cancelled by their issuers. This is because the total amount of available credit is reduced and records of on time payments are lost.

Is credit card debt settlement a good idea?

Many people in Louisiana are struggling with excessive amounts of credit card debt. They may have difficulty meeting their payment obligations on a monthly basis, racking up late fees and other additional expenses. When accounts begin to head toward default, creditors may agree to settle the debt for less than the full amount owed, especially when it comes to the amounts garnered through fees and interest charges. While debt settlement can be an attractive option for people to handle some of their debts, it may not always be the best choice.

A debt settlement is essentially a negotiation in which a lower amount is accepted in lieu of the full amount of the credit card debt. While people can handle this kind of negotiation on their own, many people think that going through a debt settlement company is necessary. In this case, the company negotiates with multiple creditors; the client pays the company each month, which it distributes among the creditors. Settlement companies also charge fees of their own, which can amount to 15 to 25 percent of the total debt. In other cases, people may stop making payments, which could have an adverse effect on their credit score.

Study finds more medical debt among younger people

Younger Louisiana residents may be more likely to fall into medical debt than their older counterparts. A study that appeared in the journal Health Affairs found that from the age 27 to 64, the size of medical debt went down almost 40 percent. This could be because older people have had more time to build up resources, and many are eligible for Medicaid. Younger people may also have more limited insurance with large deductibles.

The study also found that medical providers did not hesitate to send smaller bills to collections. More than 50 percent of collections were for bills under $600, and 2 percent were for bills of less than $200. Providers may send a bill to collections after it goes unpaid for 6 to 12 months. This may affect a person's credit rating.

Restructuring your business with a Chapter 11 bankruptcy

Although bankruptcy is a disheartening word in the world of business, many multi-national corporations use a Chapter 11 bankruptcy to avoid the demise of their business standings. Chapter 11 bankruptcies, commonly described as "restructures" or "reorganizations", allow businesses to continue to operate while creating a plan for repaying creditors.

Chapter 11 bankruptcy works to help businesses determine their assets, their debts, and those they owe to work toward paying back their heavy outstanding amounts. In cases of bankruptcy, whether your corporation owes extensive cash or your individual family lies heavily in debt to creditors, you may wish to hire an experienced bankruptcy attorney. He or she understands the crucial elements needed for filing bankruptcy and can offer advice on how to restructure your business to repay creditors. Bankruptcy may not indicate the closing of your dream and the end to your profession - it may simply mean a reorganization.