If you’re staring at a stack of bills and wondering if bankruptcy means losing the house, the car, everything you’ve worked for… It doesn’t, not automatically.
Louisiana law spells out what a debtor gets to keep, and for many families filing Chapter 7 or Chapter 13, that list covers more than people expect walking in the door. This guide breaks down Louisiana bankruptcy exemptions, what’s protected, what isn’t, and where the numbers surprise people who assumed the worst.
If you’d rather talk through your own numbers with someone, Wiley & Jowers has spent years helping New Iberia and Acadiana families figure out exactly what they keep.
Key Takeaways
- Your home is protected up to $35,000 in equity under Louisiana’s homestead exemption
- One vehicle is exempt up to $7,500 in equity
- 401(k)s, pensions, and most retirement accounts are fully protected with no dollar cap. Traditional and Roth IRAs are the one exception, capped at roughly $1.71 million per person under federal law
- Married couples filing jointly can double most exemptions, but not the homestead exemption
- Property you don’t list on Schedule C can still be sold by the trustee, exempt or not
How Louisiana Bankruptcy Exemptions Work
Louisiana exemptions decide what a bankruptcy trustee can and cannot touch when you file. Louisiana opted out of the federal exemption system, so residents use the state list instead, and that list tends to protect homeowners more generously.
There’s a wrinkle most articles skip. If you haven’t lived in Louisiana for the full two years before filing, sometimes called the 730-day rule, you may have to claim exemptions from wherever you lived before instead of Louisiana’s list. A Louisiana bankruptcy exemptions attorney can confirm which list applies to your case before you file a single form, since guessing wrong here can cost you property you thought was safe.
The Homestead Exemption: How Much of Your Home Is Protected
Your home and the land under it are protected up to $35,000 in equity under La. Rev. Stat. Ann. § 20:1, whether you own a house in New Iberia or land out in Iberia Parish. The size of the land matters too: the exemption covers up to 5 acres inside city limits, or up to 200 acres outside them.
Two exceptions round this out. If your debt stems from a catastrophic or terminal illness, the exemption can stretch to cover the home’s full value instead of stopping at $35,000. And after a hurricane or other declared disaster, insurance proceeds for repairing the home stay protected too, held separately in escrow. One thing the exemption won’t do: married couples can’t double it. Filing jointly still caps the homestead protection at $35,000 total, no matter whose name is on the deed.
Your Car, Retirement Savings, and Personal Property
Beyond the house, Louisiana protects the property most families need day to day.
- One vehicle, up to $7,500 in equity
- Retirement accounts and pensions, including 401(k)s, IRAs, and annuity contracts, generally with no dollar cap under Rev. Stat. § 13:3881(D)
- Household goods, furniture, clothing, and family portraits
- Tools of the trade, books, and instruments needed for your profession
- Wedding and engagement rings up to $5,000, and firearms up to $2,500
Wages get protection too. Louisiana law shields at least 75 percent of your disposable earnings from garnishment outside of bankruptcy, and once you file, the automatic stay stops most collection efforts immediately, whether you’re in Lafayette or here in Iberia Parish.
Chapter 7 or Chapter 13: Why the Choice Changes What You Keep
Whether you even qualify for Chapter 7 comes down to the means test, an income check that decides which chapter you’re allowed to file. Exemptions themselves don’t change between Chapter 7 and Chapter 13, but what happens to property above those limits does.
In Chapter 7, the trustee can sell anything that isn’t exempt and use the proceeds to pay creditors, though most Chapter 7 cases close within about four months. In Chapter 13, you keep the property and instead pay its non-exempt value back to creditors over three to five years, often the better route when your home or car carries more equity than the exemption covers.
Deciding which chapter fits takes judgment built from sitting with the numbers case after case, the kind of pattern recognition that comes from years spent matching filers to the right chapter rather than a formula. Talking to a Louisiana bankruptcy exemptions attorney before you file is the fastest way to find out which path protects more of what you already own.
FAQs About Louisiana Bankruptcy Exemptions
Do I lose everything if I file bankruptcy in Louisiana?
No, most filers keep the bulk of what they own. The homestead, one vehicle, retirement accounts, and everyday household goods are all covered under Louisiana’s exemption list. You’ll still need to list every item on Schedule C so the trustee knows it’s claimed.
Can my spouse and I double the exemptions if we file jointly?
You can double most exemptions when filing a joint case, but not the homestead exemption. That one stays capped at $35,000 total per household no matter how many names are on the deed. Doubling still usually protects more than filing alone would.
What happens if my home’s equity is worth more than $35,000?
The trustee could sell the home, pay off the mortgage, hand you your exempt $35,000, and give the rest to creditors. In practice, trustees often leave small overages alone because the cost of a sale eats into any benefit for creditors.
Will filing stop wage garnishment while my case is open?
Yes, filing triggers an automatic stay that halts most garnishment right away, regardless of how much of your paycheck Louisiana law already protects. Creditors need the bankruptcy court’s permission to restart collection once the stay is in place.
Wiley & Jowers: Your Louisiana Bankruptcy Law Firm
Knowing what stays protected changes the whole conversation, and it can be a shorter list of worries than people expect walking in.
At Wiley & Jowers, we sit down with every client and map out exactly what stays and what’s at risk before a single form gets filed, the same groundwork built over years of bankruptcy work across Acadiana. If you’re in New Iberia, Lafayette, or anywhere in Iberia Parish and wondering where your assets stand, contact our firm today for a free initial consultation, and find out what you get to keep.
