Category Archives: Bankruptcy

Bankruptcy Pros and Cons

The Pros and Cons of Filing for Bankruptcy: A Louisiana Perspective

Author By Stephenson, Chávarri & DawsonPosted on

The Pros and Cons of Filing for Bankruptcy: A Louisiana Perspective

In 2021, the American Bankruptcy Institute reported 1613 bankruptcy cases in Louisiana. Individuals who decide to file bankruptcy may be doing so for one of these common reasons: 

  • Loss of income
  • Medical debt
  • Home foreclosure
  • Credit card debt
  • Supporting family or friends financially

Embarking on the path of understanding bankruptcy requires acknowledging its unique nature in different states. In Louisiana, bankruptcy laws have their distinct features and implications. Bankruptcy isn’t just about waving a white flag; it’s a complex legal process with significant financial and personal effects. It offers avenues for individuals and businesses overwhelmed by debt to potentially start anew or restructure their obligations. However, it’s not a decision to be taken lightly.

Pro #1: Instant Relief from Creditors Through Automatic Stay

When filing for bankruptcy, one immediate benefit that arises is the “automatic stay.” It’s a temporary injunction that halts actions by creditors, collection agencies, and government entities to recover debts. Imagine having a pressing pause button on all debt collections, repossessions, foreclosures, or wage garnishments. Sounds like a sigh of relief, doesn’t it? That’s what automatic stay offers. Especially in Louisiana, where debt struggles can be high, this offers breathing room to those under the stress of unending debt demands. However, remember that the relief is temporary and doesn’t erase the debt. It’s a time-out to restructure, reassess, and figure out the next steps.

Con #1: The Long-lasting Impact of Bankruptcy on Your Credit Report

While bankruptcy might provide immediate relief, it’s essential to remember it comes with long-term effects. One of the most impactful is the stain left on an individual’s credit report. Depending on whether it’s a Chapter 7 or Chapter 13 bankruptcy, it can remain on a report for 7 to 10 years. This mark can lower a credit score considerably and make it challenging to secure loans or credit in the future. Landlords and employers might also check credit reports, meaning bankruptcy could influence housing and job opportunities. For someone in Louisiana looking for a fresh start, these are key considerations when thinking about filing for bankruptcy.

Pro #2: A Potential Fresh Start with Chapter 7 Bankruptcy

Under this type of bankruptcy, most of a debtor’s unsecured debts, like credit cards and medical bills, can be discharged or wiped out. This process allows people to eliminate the burden of insurmountable debts and begin anew financially. It’s like getting a second chance to restructure your financial life. However, not everyone qualifies for Chapter 7, and there are specific rules and requirements involved. 

Con #2: The Loss of Non-exempt Assets During Liquidation

While Chapter 7 bankruptcy can offer a fresh start by discharging many debts, it also has its downside. One significant drawback is the potential loss of non-exempt assets during the process. In a Chapter 7 bankruptcy, some of the debtor’s property may be sold or “liquidated” to pay off creditors. Although Louisiana law does provide some exemptions to protect necessary items like a certain amount of home equity and personal property, luxury items or non-essential assets may not be protected. Losing valuable possessions can be a tough pill to swallow.

Pro #3: Reorganizing Debt through Chapter 13 Bankruptcy

Chapter 13 bankruptcy represents another option that carries its unique benefits. Unlike Chapter 7, which discharges debts, Chapter 13 focuses on reorganizing them. Under this plan, debtors in Louisiana create a 3- to 5-year repayment plan to pay back all or a portion of their debts. An upside of this approach allows people to catch up on missed mortgage or car payments, potentially avoiding foreclosure or repossession. Also, in Chapter 13 bankruptcy, debtors generally keep all their property, which makes this a desirable route for those with significant assets they’d like to protect while they restructure their finances.

Con #3: The Length and Commitment of a Repayment Plan

While Chapter 13 bankruptcy can be a solid choice for many in Louisiana, it’s worth noting it’s not a quick solution. It requires a commitment to a repayment plan typically lasting 3 to 5 years. This timeframe means while you’re chipping away at debt, you’ll be living on a strict budget, which can be challenging for many people. Additionally, if your financial situation worsens during this period, it can be more difficult to adjust the repayment plan. This long-term commitment is not for everyone and is a significant factor to weigh when considering Chapter 13 bankruptcy.

Pro #4: The Impact of Louisiana’s Homestead Exemption in Bankruptcy

One factor that can make bankruptcy more favorable for Louisiana residents is the state’s generous homestead exemption. This exemption protects a certain amount of equity in your primary residence during bankruptcy. In Louisiana, this protection extends to properties up to a certain value, regardless of how much you owe on a mortgage. This means you can file for bankruptcy and, in most cases, keep your home. For homeowners, this is a significant benefit. It provides a layer of security, knowing even in challenging financial circumstances, they can maintain their family home while working through their financial difficulties.

Con #4: The Possible Stigma and Emotional Impact of Bankruptcy

Bankruptcy, despite its financial implications, also carries a potential social and emotional toll. For many, declaring bankruptcy can feel like admitting defeat, which can lead to feelings of embarrassment or failure. This stigma can affect personal relationships and self-esteem. Plus, the stress of dealing with significant financial issues can lead to anxiety and other mental health challenges. It’s also worth noting these emotional impacts are not confined to the person filing for bankruptcy. Family members, especially children, may also feel the stress. So, when considering bankruptcy in Louisiana, it’s important to be mindful not only of the financial pros and cons but also of the possible emotional and social consequences.

Making an Informed Decision About Bankruptcy in Louisiana

Bankruptcy Law

Filing for bankruptcy in Louisiana is a significant decision with many layers to consider. From the immediate relief it offers to the potential long-lasting effects on credit reports, it’s a path filled with both pros and cons. Moreover, Louisiana’s unique laws such as the generous homestead exemption may shape this decision differently for homeowners in the state. The social and emotional impacts also play a role. At the end of the day, understanding these factors can equip anyone facing this decision with the knowledge they need. Making an informed decision is all about balancing the potential advantages against the possible drawbacks, always bearing in mind the specifics of one’s own situation.

If you are needing to file for bankruptcy, call 504-523-6496 or contact our expert team for a free consultation. 

Bankruptcy and COVID-19: What You Need to Know and How an Attorney Can Help

Author By Stephenson, Chávarri & DawsonPosted on

Nobody wants or expects to file for bankruptcy. However, when the COVID-19 pandemic ends up laying off millions of people, bankruptcy becomes a promising option for many. Especially when it can offer the relief that individuals need to help them continue to operate their business or provide them with a new beginning for a better future.

Before you make the critical decision of whether you need to file for bankruptcy, continue to read below and see how the COVID-19 outbreak has affected bankruptcy laws in Louisiana, what other steps you can take before filing, and how a bankruptcy attorney can help you.

Bankruptcy Changes During COVID-19

COVID-19 has brought with it many changes. Not only affecting our daily lives but changing how courts operate and how legal procedures are enacted across the country. The following bankruptcy rule updates have been implemented under the Federal Coronavirus Aid, Relief, and Economic Security (CARES) Act to help individuals during this Corona outbreak:

  • Individual Debtor: Under this Act, a debtor with a pre-existing Chapter 13 repayment plan can extend the length of their plan. However, to obtain this modification, the debtor needs to show a material financial hardship resulting from the pandemic.
  • Stimulus Checks: Stimulus checks and other federal law payments related to COVID-19 will not have an impact on debtors wishing to file for bankruptcy under Chapter 7 or Chapter 13.
  • Business Relief: For businesses looking to file for bankruptcy under Subchapter V of Chapter 11, the Act has substantially increased the debt limit, while also helping to relieve some financial challenges that companies face when filing for bankruptcy. It did this by stopping quarterly fees and stretching out payments, while also simplifying and speeding up the process so that businesses can get relief as soon as possible.
  • Original Signature Waivers: Usually, a bankruptcy attorney needs to get an original signature from their debtor client on their petition to file for bankruptcy. However, during the COVID-19 pandemic, particular bankruptcy courts in Louisiana have decided to waive this requirement, and now debtors and their attorney can review the paperwork virtually.
  • Section 341 Hearing: Debtors who file for bankruptcy under Chapter 13 or Chapter 7, usually have to take part in a meeting of creditors under Section 341 of the Bankruptcy Code. However, because of COVID-19, many of these meetings are now being conducted by telephone or another form of remote communication. You will need to check your specific court’s website to verify how they will be modifying their procedures for these meetings.

What Can you Do To Protect Yourself From Bankruptcy

With everything going on, it may be difficult to fit anything else onto your plate. Yet, by taking a minute and familiarizing yourself with possible programs that can conserve you money right now, it can help you avoid bankruptcy later on. And even though things may seem dire at this moment, there are steps that you can take to protect your rights and your business, and help prepare you for the best outcome post-COVID-19:

  • Student Loans: The government has allowed students to defer loan payments temporarily. Those with private loans should check with their provider if they have similar options.
  • Mortgage, Credit Card Payments, Car Payments: if you are having a hard time making payments, many institutions are offering loan extensions and deferred payment options. Some lenders are even offering emergency loans for those that need money right now.
  • Utility Bills: Many towns and cities have prohibited utility shut-offs during this Covid-19 pandemic. Yet, it is crucial to keep in mind that you will still need to pay the balance later, and you need to plan accordingly as the pay-off amount can be quite large.
  • Negotiate Your Debt: If you put your payments on hold, during this crisis, you may be able to negotiate lower fees with your creditors and even your landlord when you start the repayment process.
  • Government Assistance: Take a look into specific government programs that offer an extensive range of grants and no-interest loans to help small businesses stay afloat during this pandemic.
  • Do Not Stop Payments: Make sure you do not stop making any payments based on anything you heard or read on the internet. To qualify for any programs, you will have to apply and then wait to receive a qualification confirmation. If you stop paying before you are allowed to, it can result in many issues for you later on.

Why You Need an Experienced Bankruptcy Attorney

During these unprecedented times, it is no surprise that many people are worried about their financial stability. With all the “what ifs” that surround countless families, trying to figure out the next step can leave many with a lot of fear, tension, and worry.

On top of all the stress, the many new legal procedures that are being implemented because of COVID-19 can leave anyone feeling confused and uncertain. That is why now more than ever, it is essential to contact a knowledgeable and trusted bankruptcy attorney that can help you. These lawyers can:

  • Provide you with the up-to-date information to help you understand how your local, state, and federal laws have been affected due to COVID-19 and how they will affect you individually or your business.
  • Help you figure out what legal actions work best for you personally or your business.
  • If you choose to file for bankruptcy, they will provide you with the guidance and support you need to help protect your business’s future or your individual assets.

Call Stephenson, Chávarri & Dawson, L.L.C. Today

At Stephenson, Chávarri & Dawson, L.L.C., we understand what a challenging time this is for you and your loved ones. That is why our firm’s goal is to provide you with the clarity you need, the legal options you want, and the peace of mind you and your business are counting on. Do not wait any longer, contact our firm today, or call us at 504-523-6496, to speak with one of our experienced bankruptcy attorneys.

Benefits of Hiring a Bilingual Attorney in New Orleans

Author By Stephenson, Chávarri & DawsonPosted on

What are the first things you consider when you go to hire an attorney? If you are like most people, experience, expertise, and disciplinary history are at the top of the list. And those are all important points to consider when you choose an attorney. But what about communication? We’re not just talking about accessibility and responsiveness (although those are important too). How much thought do you put into what language your attorney speaks? Obviously, it’s important that your attorney is fluent in your native language, but what about other languages? There are many benefits to hiring a bilingual attorney. At Stephenson, Chavarri & Dawson, L.L.C., we have attorneys who are fluent in English, Spanish, and French.

Why do I need a bilingual attorney?

If your primary language is English, you might not see the value of hiring a bilingual attorney. In fact, unless you speak a language other than English, most people don’t think twice about what language their attorney speaks. After all, all communication will be in English, right? Maybe not. According to the Center for Immigration Studies, recent numbers show that over 66 million US residents speak a language other than English at home. Of those people, nearly 26 million say they speak English less than “very well.” That’s almost 8% of the US population. So how can a bilingual attorney help?

Witness testimony

Witness testimony is an important component of any personal injury or criminal defense case. Even in family law, witnesses can make a big difference in the outcome of your case.  What happens if your primary witness doesn’t speak English? Sure, you can hire a translator, but there are a couple downsides to that. Number one is cost. Every expert or professional you bring on to your case comes with a cost. If you have a bilingual attorney, that is one less cost you will have to incur. Another consideration is comfort. For whatever reason, the witness in your case may or may not feel comfortable talking to an attorney (or in front of a jury). If your attorney speaks the same language as the witness, they may be able to help the witness feel more comfortable.

Attorney-client communication

Maybe you’re looking for an attorney for your family member who doesn’t speak English. Trust and communication are extremely important in any type of legal matter. Whether you are planning your estate or filing a personal injury suit, you want to know that your attorney has your best interest at heart. At Stephenson, Chavarri & Dawson, L.L.C., our goal is to make you feel comfortable. We do our best to match incoming clients with the attorney who will best serve their communication needs.

Cultural awareness

Being bilingual isn’t just about knowing another language, it’s about understanding and respecting another culture. Every culture has its own beliefs and traditions. With any form of communication, it’s important to understand a person’s cultural beliefs. Different belief systems can make a big difference when it comes to estate planning, divorce and custody matters, and immigration laws.

How to find a qualified attorney

Beyond making sure that you and your attorney can have open communication (which is arguably the most important thing in any legal matter), there are other considerations you need to keep in mind when you choose an attorney. We touched on a few of these items earlier, but let’s take a look at what you should look for in an attorney and how you can find the right one for you:

  • Ask for personal recommendations: Your friends and family likely have a good sense of your personality type and your unique needs. Asking someone who has personal experience with an attorney is often the best way to find someone to work with. They’ll be able to give you insight into office practices, billing, and overall quality. At Stephenson, Chavarri & Dawson, L.L.C., we love it when a new client comes to us after being recommended by a friend.
  • Do your research: While personal recommendations are good, A: sometimes they are not reliable, and B: sometimes you won’t know anybody who has used an attorney. Whether you find your attorney through your best friend, or by searching Google, research is your friend. Sites like AVVO and Super Lawyers, provide honest reviews from former clients. Additionally, you should always check out your potential attorney’s disciplinary history. In Lousiana, you can look up an attorney’s status here.
  • Schedule a consultation: The best way to determine whether an attorney will be a good fit is to sit down and have a consultation. This is your opportunity to ask your potential attorney about their experience, philosophies, and billing structures. Don’t forget to ask about their availability and trial experience. It’s important that you feel comfortable with your attorney. Keep looking until you find the one that’s right for you.

Invest in your future

We cannot overstate how important it is to work with a competent attorney who you can trust. Legal matters can be complex and you want to hire someone who you know has your best interest in mind. In the same regard, it’s important to choose an attorney who can effectively argue your case and understands your individual needs. In some cases, choosing a bilingual attorney is a necessity. For others, it’s just a smart choice. The best legal strategy involves having the right tools and being able to communicate your needs.

Our office is located off of BUS 90, just blocks from the Mississippi River. Our physical address is 400 Poydras Street, Suite 1990 New Orleans, LA 70130. We are a multi-disciplinary firm with attorneys who work in family law, personal injury, immigration law, and other legal specialties. To learn more about our team or to schedule a consultation, contact our office at 504-523-6496 or fill out our online contact form to get started.

Five Facts to Know When Filing for Bankruptcy in New Orleans

Author By Stephenson, Chávarri & DawsonPosted on

When Filing for Bankruptcy

Filing for bankruptcy is a serious matter. It affects your life and finances for several years. It is crucial to understand what happens during the process before filing in New Orleans or anywhere else. Here are five key facts to know when you file for bankruptcy: 

1. Your Finances Will be Open to Public Scrutiny

Bankruptcy laws require you to fill out paperwork referred to as bankruptcy schedules. These documents list your income, assets, expenditure, debts, and other relevant information. The law also requires that you hold a meeting of creditors in public where a public trustee and creditors can ask probing questions. Even if you use a bankruptcy lawyer to try and evade this requirement, most courts will not grant your request. By filing for bankruptcy, you leave your finances open for scrutiny, which may lower your public standing in some people’s eyes.

2. Not All Debts Can be Discharged

Many people file for bankruptcy because they are unable to meet their financial obligations. A debt discharge simply means that you do not have to pay the debt and prevents creditors from taking any action against you. Types of debts that can be discharged in bankruptcy include credit card charges, medical bills, business debts, tax penalties, and others. However, some debts cannot be discharged, and these include child support and alimony, student loans, and income tax.

3. There Are Two Major Types of Bankruptcy Filings

The two most common types of bankruptcy options include Chapter 7 bankruptcy and Chapter 13 bankruptcy. Chapter 7 is also known as liquidation bankruptcy because it allows the court to sell off your property and assets to pay off your debts. Chapter 13 is referred to as reorganization bankruptcy as it allows you to complete a court-mandated repayment plan to keep your assets.

4. It Can Ruin Your Credit

Filing for bankruptcy can destroy the credit rating you have spent years building. Further, you may find yourself listed in credit bureaus for up to 10 years, which may affect your ability to borrow and gain access to other financial resources.

5. It Can be an Expensive Undertaking

Even if you are filing for bankruptcy, you still have to pay the costs related to complete the process. The major expenditure here will be lawyer fees which must be paid upfront. You will also be required to pay court fees and other costs related to processing your bankruptcy.

In Conclusion

It is necessary to understand the process of filing for bankruptcy.  When you are prepared for the outcome, it can make this difficult situation a little easier to navigate. If you still have questions, speak with an accountant or financial advisor. If you need New Orleans bankruptcy attorney or related services, you can discuss your options with our team during your initial consultation. At Stephenson, Chávarri & Dawson, L.L.C., we know what it takes to get results. Contact our office today by calling 504-523-6496 or you can send us a message via our online contact form.

How to Select the Right Bankruptcy Lawyer

Author By Stephenson, Chávarri & DawsonPosted on

You have been struggling with debt, and after thinking about it some times, you have finally decided to file for bankruptcy. There are many things that you need to consider. For example, which type of bankruptcy should you file and what documents are required. A bankruptcy lawyer can help you out here. But how do you select the right bankruptcy lawyer? Here are some points to keep in mind.

Experience

Always select a new orleans bankruptcy attorney with experience. If they have years of experience and have fought many cases, they already know what to do. You can ask them about the types of bankruptcy cases that they have handled. If they have worked on several Chapter 7 cases but not many of Chapter 13, they might not be able to deal with a Chapter 13 case efficiently and might push you towards Chapter 7. It’s best to visit a lawyer who can work on all types of cases.

Proficiency

Finding out a lawyer’s proficiency is difficult. While experience is an indicator of competence, it can be misleading at times. For example, there might be a lawyer who has worked on several cases but did a bad job each time. To know about the proficiency of a bankruptcy attorney, you can ask your friends or family. People can refer you to their lawyers and suggest whether they have the required aptitude. If you don’t know anyone who knows a lawyer, you can check online and read reviews.

Fees

Most people are looking for cheap solutions. However, it’s best to keep in mind that you get what you pay for. You should get a lawyer who gives individual attention to each client. Many bankruptcy lawyers act like document mills; they just process documents for their customers without providing them any additional support. However, keep in mind that high fees wouldn’t guarantee the best services either. The best thing you can do is look around and get recommendations from friends and family. Additionally, as discussed earlier, you can look for online reviews as well.

Communication

If the lawyer is not readily available when you contact them, there is no point hiring them. They might give out their number to you, but that doesn’t guarantee that they will always pick up your phone. You might need them in exceptional conditions. For example, if creditors are bothering you or you’re getting emails from your bank, you would need your lawyer’s immediate support. If they don’t answer the phone in such cases, you’ll feel stuck. Ask them about their timings of availability. If they don’t allow you to call during all hours, then try to look for someone who does.

You must be having a list of bankruptcy lawyers. Start evaluating them based on these points and weed out the ones that do not fit the criteria. Soon, you will have a handful of agents who are the best and can help you out efficiently.

It’s not easy to find the look for a good bankruptcy lawyer, but with a little research and a bit probing, you can find the best attorney. Another factor that you may consider is the personality of the lawyer. If you feel uncomfortable around them, it’s best to look for another lawyer. You cannot carry out successful business with someone with whom you cannot be open.

If you need New Orleans bankruptcy lawyer or related services, you can discuss your options with our team during your initial consultation. At , Contact Stephenson, Chávarri & Dawson, L.L.C. today by calling 504-523-6496 or you can send us a message via our online contact form.

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