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

Chapter 13 bankruptcy in Louisiana lets a person with steady income reorganize debt into a court-supervised repayment plan that runs three to five years, keeping property such as a house or car while catching up on what is owed. To use it, your unsecured debts must stay under $526,700 and your secured debts under $1,580,125.¹ Unlike Chapter 7, which sells nonexempt assets to pay creditors, Chapter 13 is a repayment case: you commit your disposable income to a trustee each month, and at the end most remaining unsecured debt is wiped out.

Who Can File

Chapter 13 is for individuals, not businesses. Corporations and partnerships cannot use it at all. You need a predictable source of income, which can be wages, self-employment earnings, a pension, Social Security, or rental income. Married couples can file together on one petition.¹

The debt ceilings are separate, not combined. Credit cards, medical bills, and personal loans count toward the $526,700 unsecured cap. Mortgages and car loans count toward the $1,580,125 secured cap. If you exceed either one, Chapter 13 is off the table, though Chapter 11 may be an option worth asking an attorney about.

One step catches people off guard: within 180 days before you file, you have to complete a credit counseling session with a nonprofit agency approved by the U.S. Trustee Program.² Most approved agencies offer it by phone or online.³ Skip the session and the court can dismiss your case.

How Long Your Plan Lasts and What You Pay

Plan length depends on how your household income compares to Louisiana’s median. As of 2025, the median figures published by the U.S. Trustee Program 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 person beyond four.⁴

Below the median, you can propose a three-year plan. Above the median, your plan generally has to run five years. The monthly payment is driven by your “disposable income,” which is your take-home pay minus reasonable living expenses, and all of that disposable income has to go into the plan.¹

There is a second test on top of that, often called the best-interests-of-creditors test. Your unsecured creditors must receive at least as much through the plan as they would have gotten if you had filed Chapter 7 and your nonexempt property had been sold. The value of your nonexempt assets sets a floor on what the plan has to pay them, even if your disposable income number alone would be lower.¹ That makes Louisiana’s exemption rules unusually important in a Chapter 13 case: they shape your monthly payment, not just what you get to keep.

What Property You Keep

Louisiana opted out of the federal exemption system. You have to use Louisiana’s own list.⁵

Your Home

Louisiana shields up to $35,000 of equity in your primary residence. If you owe $150,000 on a house worth $180,000, your $30,000 of equity falls inside the exemption. One exception matters: when the debts come from a catastrophic or terminal illness or injury, the exemption covers the home’s full value as of 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 using the NADA retail figure for the year, make, and model. A vehicle that has been substantially modified for a household member’s disability gets its own separate $7,500 exemption.⁵

Everyday household goods such as furniture, appliances, bedding, and clothing are exempt without a specific dollar cap. Wedding and engagement rings are protected up to $5,000 per ring. Firearms, ammunition, and accessories share a $2,500 limit.⁵

Work Tools and Retirement

Tools, instruments, books, and one utility trailer necessary for your occupation are exempt, with no dollar cap. A contractor’s full kit or a physician’s instruments can be protected as long as they are genuinely needed for the work.⁵

ERISA-qualified retirement plans like 401(k)s and pensions are shielded without a dollar limit under federal law. Traditional and Roth IRAs are also protected, with a federal cap that currently exceeds $1.5 million. Two Louisiana wrinkles: contributions made to an IRA less than a year before filing are not exempt, and the exemption does not apply to debts for child support or alimony.

What It Costs

The court filing fee is $313, which you can split into as many as four installments over 120 days. Attorney fees are usually the larger expense. Louisiana courts allow a flat “no-look” fee the judge will approve without detailed billing, and across the state Chapter 13 attorney fees commonly run $3,500 to $6,000. Those fees almost always get folded into the plan itself, so you pay them through your monthly trustee payment rather than up front.

The trustee also takes a cut of every dollar that flows through the plan. Federal law caps the trustee’s fee at 10% of plan payments.⁷ That is built into the math of your monthly obligation. The two required educational courses (credit counseling before filing, and a debtor education course after) usually cost $25 to $50 each, with fee waivers sometimes available.

What Happens After You File

You file in the federal bankruptcy court for the district where you live. The second your petition is filed, the automatic stay takes effect, barring creditors from calling, suing, garnishing wages, or foreclosing while the case is active.⁸ If you had a bankruptcy case dismissed in the previous year, the stay only lasts 30 days unless you ask the court to extend it. Two dismissals in the past year means no automatic stay at all without a court order.

Your first plan payment is due to the trustee within 30 days of filing, even though the court has not yet approved the plan.⁹ A lot of filers miss this. The clock starts right away, and early missed payments can sink a case before it really gets going.

Roughly 20 to 40 days after filing, you attend the Meeting of Creditors, often called the 341 meeting. The Chapter 13 trustee asks about your income, expenses, assets, and the accuracy of your schedules. Creditors are allowed to attend; most do not. 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.

Before the court will enter a discharge at the end, you also have to complete the post-filing debtor education course from a U.S. Trustee-approved provider.¹⁰ Skip it and your debts will not be discharged even if you paid every installment on time.

Debts That Still Survive

Finishing the plan erases most remaining unsecured debt, but some obligations do not go away:

Child support and alimony.
Priority tax claims included in the plan, which must be paid in full. Some older tax debts can be dischargeable, but recent income taxes are not.
Government-funded or guaranteed student loans, unless you prove undue hardship in a separate court proceeding, which remains a high bar.
Debts from death or personal injury caused by driving while intoxicated.
Criminal fines and restitution.
Mortgages and other long-term secured debts that extend past the plan period, which continue on their original terms.

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

If Your Situation Changes Mid-Plan

A three-to-five-year plan rarely survives untouched. Job loss, medical emergencies, and unexpected expenses are common, and the bankruptcy code builds in room for them. You, the trustee, or even an unsecured creditor can ask the court to modify a confirmed plan to adjust the payment, lengthen or shorten the term, or respond to changed finances. The modified plan still cannot stretch beyond five years from the date your first original payment was due.¹¹

If things get bad enough that no modification can keep the plan alive, you can ask the court for a hardship discharge. The requirements are strict. Your inability to finish has to come from circumstances genuinely beyond your control, your unsecured creditors must already have received at least what Chapter 7 would have paid them, and further modification must not be feasible.¹² A temporary pay cut will usually not clear that bar; a permanent disability wiping out your income might.

If you simply stop paying and do nothing, the trustee or a creditor will move to dismiss. Dismissal lifts the automatic stay entirely, and creditors can go right back to lawsuits, foreclosures, and garnishment. Payments you already made did go to your creditors and reduced what you owed, but you do not get any special credit for them against your remaining balance. You can refile, but the automatic stay rules tighten on repeat filings: 30 days of stay after one prior dismissal in the past year, no stay at all after two, unless the judge grants a motion to extend or impose it. The cleanest way to avoid this is to call your attorney the moment you realize you cannot make a payment. A modification requested early is far easier to get than one asked for after you are months behind.

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
Office of the Law Revision Counsel. 11 U.S. Code 362 – Automatic Stay
9
Office of the Law Revision Counsel. 11 USC 1326 – Payments
10
United States Courts. Credit Counseling and Debtor Education Courses
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