Chapter 13 Bankruptcy in Louisiana: Plan, Costs, and Exemptions

Chapter 13 bankruptcy in Louisiana lets a person with steady income restructure debt into a court-supervised repayment plan that runs three to five years, keeping property (a home, a car, retirement accounts) instead of surrendering it. You qualify if your unsecured debts are under $526,700 and your secured debts under $1,580,125, and if your income is predictable enough to fund a monthly payment. Louisiana uses its own exemption rules rather than the federal set, which shapes both what you protect and what your plan must pay.¹

Who Can File

Chapter 13 is for individuals, not corporations or partnerships. Married couples can file jointly. Your income can come from wages, self-employment, a pension, Social Security, or rental property; what the court cares about is that it’s regular enough to support monthly payments.¹

The debt ceilings are separate, not combined. Unsecured debts (credit cards, medical bills, personal loans) must stay under $526,700. Secured debts (mortgage, car loans) must stay under $1,580,125. If you’re over either cap, Chapter 13 isn’t available and Chapter 11 becomes the reorganization option to discuss with an attorney.

One requirement people miss: you have to complete a credit counseling session with a U.S. Trustee–approved nonprofit within 180 days before you file. Skip it and the court can dismiss the case outright.² Most approved agencies offer the session by phone or online.³

Three Years or Five, and How Your Payment Gets Set

Your household income compared to Louisiana’s median decides the plan length. For 2025 the medians are $53,677 for one earner, $69,288 for a two-person household, $78,616 for three, and $98,041 for four, with $11,100 added for each additional member.⁴

Below the median, you can propose a three-year plan. Above it, you generally need five. The court then figures your “disposable income” (take-home pay minus reasonable living expenses), and all of it goes into the plan.¹

There’s a second floor. Under the “best interests of creditors” test, unsecured creditors must receive at least what they’d have gotten if you’d filed Chapter 7 and your nonexempt property had been sold. The value of your nonexempt assets, in other words, sets a minimum for what your plan has to pay them, even when your disposable income would suggest a smaller number.¹ That’s why Louisiana’s exemption rules matter so much: they decide what counts as nonexempt.

Louisiana Exemptions: What You Keep

Louisiana opted out of the federal exemption set, so you use state exemptions.⁵

Your Home

The homestead exemption protects up to $35,000 of equity in your primary residence. If you owe $150,000 on a home worth $180,000, the full $30,000 of equity is shielded. One exception: if the debts arose from a catastrophic or terminal illness or injury, the exemption covers the home’s full value, measured by what it was worth one year before seizure.⁶

Vehicles and Personal Property

You can exempt up to $7,500 of equity in one motor vehicle per household, valued at NADA retail for the year, make, and model. A separately modified vehicle used by a household member with a disability gets its own $7,500 exemption.⁵

Everyday household items (furniture, appliances, bedding, clothing) are exempt with no specific dollar cap. Wedding and engagement rings are protected up to $5,000 per ring. Firearms, ammunition, and accessories share a $2,500 limit.

Work Tools and Retirement

Louisiana exempts the tools, instruments, books, and one utility trailer necessary for your occupation, without a dollar cap. A contractor’s full set of equipment, or a physician’s instruments, can be protected as long as they’re genuinely needed for work.

Retirement accounts get strong protection. ERISA-qualified plans like 401(k)s and pensions are shielded without a dollar limit under federal law. Traditional and Roth IRAs are also protected, under a federal cap that currently exceeds $1.5 million. Two Louisiana wrinkles: IRA contributions made less than a year before filing aren’t exempt, and the exemption doesn’t apply to child support or alimony debts.

What Chapter 13 Costs

The court filing fee is $313, payable in up to four installments over 120 days if you can’t pay it all upfront.

Attorney fees are usually the biggest expense. Louisiana courts allow a “no-look” flat fee that the court approves without detailed billing, and Chapter 13 attorney fees across the state commonly fall in the $3,500 to $6,000 range. These fees are almost always folded into the plan, so you pay them over time through your trustee payments rather than upfront.

The Chapter 13 trustee also takes a percentage of every payment that flows through the plan, capped by federal law at 10% of plan payments.⁷ Build that into your monthly number: if $500 goes to creditors, your total payment to the trustee runs somewhat higher.

Add small charges for the two required education courses (typically $25 to $50 each), with fee waivers available in some cases.⁸

Filing and the First Few Months

You file in the federal bankruptcy court for the district where you live. Louisiana has three: Eastern (New Orleans), Middle (Baton Rouge), and Western (Shreveport, Lafayette, Lake Charles).

The moment the petition is filed, the automatic stay takes effect. Creditors can’t call you, sue you, garnish your wages, or foreclose while the case is active.⁹ If a prior bankruptcy was dismissed within the past year, the stay lasts only 30 days unless the judge extends it. Two dismissals in the past year, and there’s no automatic stay at all unless you file a motion and win.

Your first plan payment is due to the trustee within 30 days of filing, before the court has even confirmed the plan.¹⁰ Miss those early payments and the case can collapse before it starts.

Roughly 20 to 40 days after filing, you attend the Meeting of Creditors (the 341 meeting). The trustee asks about your income, expenses, assets, and the accuracy of your schedules. Creditors can attend, though most don’t. A confirmation hearing follows, where the judge decides whether your plan meets federal requirements. Once confirmed, you make monthly payments to the trustee for the length of the plan, and the trustee distributes the money to your creditors.

You also have to complete a second course (debtor education, sometimes called financial management) after filing but before discharge. It’s separate from pre-filing credit counseling, can’t be taken at the same time, and must come from a U.S. Trustee–approved agency.⁸ Skip it and your debts don’t get discharged, even if you made every plan payment.

Debts That Don’t Go Away

Finishing a plan wipes out most remaining unsecured debt, but some obligations survive:

Child support and alimony can’t be reduced or eliminated.
Priority tax claims included in the plan must be paid in full; recent income taxes are not dischargeable, though some older tax debts may be.
Government-funded or guaranteed student loans survive discharge unless you win a separate undue-hardship proceeding, which remains a high bar.
Debts arising from death or personal injury caused by driving while intoxicated stay.
Criminal fines and restitution stay.
Long-term secured debts, like a mortgage extending past the plan period, continue on their original terms.

Debts obtained through fraud or intentional harm can also survive, but only if the creditor files a specific challenge inside the case.¹

When Life Changes During the Plan

Three to five years is a long time. Jobs end, medical bills arrive, cars break down. You, the trustee, or an unsecured creditor can ask the court to modify a confirmed plan (adjusting payment amounts, extending or shortening the term, accounting for a change in circumstances). The modified plan still can’t run longer than five years from the date the first original payment was due.¹¹

If no realistic modification can save the plan, you can ask for a hardship discharge. The requirements are strict: the failure to complete the plan has to stem from circumstances genuinely beyond your control, unsecured creditors must already have received at least what Chapter 7 would have given them, and further modification must not be feasible.¹² A temporary pay cut probably won’t qualify. A permanent disability that eliminates your income might.

If the Case Gets Dismissed

Stop paying without seeking a modification or hardship discharge, and the trustee or a creditor will move to dismiss. Dismissal lifts the automatic stay entirely, and creditors can resume collection, lawsuits, foreclosures, and garnishments the next day. Payments you already made went to your creditors and reduced what you owed, but you don’t get “credit” toward a discharge that never happens.

You can refile, but the consequences build. A second filing within a year of a dismissal gives you an automatic stay that expires after 30 days unless extended. A third filing within a year of two prior dismissals gets no automatic stay at all without a court order, and judges will look harder at whatever new plan you propose. The practical rule: call your attorney the moment you know you can’t make a payment, because a modification filed early is much easier to get than one requested after months of missed payments.

1
United States Courts. Chapter 13 – Bankruptcy Basics
2
Office of the Law Revision Counsel. 11 USC 109 – Who May Be a Debtor
3
United States Department of Justice. Credit Counseling and Debtor Education Information
4
U.S. Trustee Program. Census Bureau Median Family Income By Family Size
5
Louisiana State Legislature. Louisiana Revised Statutes 13:3881 – General Exemptions From Seizure
6
Justia. Louisiana Code 20:1 – Declaration of Homestead; Exemption From Seizure and Sale
7
Office of the Law Revision Counsel. 28 USC 586 – Duties; Supervision by Attorney General
8
United States Courts. Credit Counseling and Debtor Education Courses
9
Office of the Law Revision Counsel. 11 U.S. Code 362 – Automatic Stay
10
Office of the Law Revision Counsel. 11 USC 1326 – Payments
11
Office of the Law Revision Counsel. 11 USC 1329 – Modification of Plan After Confirmation
12
Office of the Law Revision Counsel. 11 USC 1328 – Discharge