Louisiana has more than its fair share of destructive storms. These natural disasters can lead to financial crisis for Louisiana residents, who are already among the nation's most debt-laden. The result? Periods of rapid debt accumulation.
Having a disaster fund is really important for people in Louisiana. But not everybody can afford that luxury in Louisiana.
Are you a Louisiana resident struggling to pay down your debt? Drowning in credit card bills and unending interest? There's help for you!
Louisiana has specific laws that govern debt relief and the rights of both consumers and creditors in the state.
Here are some important resources to check out and key points to know ...
Louisiana Debt Relief Facts
Did you know Louisiana residents carry some of the highest debt loads in the entire country? Louisiana is just outside the Top 10 for highest amount of non-mortgage debt per resident.
The state of Louisiana is among the nation's worst for poverty. Louisiana is the third poorest state in the nation. Louisiana's per-capita income is $46,208, according to the U.S. Chamber of Commerce.
Hovering around 20%, Louisiana’s poverty rate is tied with it's neighbor Mississippi for worst in the country. Here's a guide for debt relief and reduction in Mississippi, too.
Despite these grim statistics, Louisiana's residents fall nearly perfectly in the middle of the pack (24th) for the average credit card balance ($8,110).
There's some more good news for Louisiana student loan debt. Louisiana has the seventh-lowest average student debt per borrower, clocking in at $23,855 average per Louisiana borrower. However, this may be a result of the strength of the largest debt collector in the state ... the State.
The Louisiana Attorney General is responsible for most student loan debt collection in the state. More on that below ...
Louisiana Debt Relief Programs, Law Firms, and Services >>
Here is your full guide to Louisiana debt relief programs and legal services that can help you tackle your debt.
Struggling to pay your bills? The State of Louisiana has a variety of programs that can help you:
Louisiana Debt Relief Programs: Employment
Trouble finding work? Looking for unemployment benefits? The Louisiana Workforce Commission provides help to job seekers with a central clearinghouse for job openings, job fairs and other employment information. This is also the place to go when seeking unemployment benefits.
Louisiana Debt Relief Programs: Housing
Trouble affording housing? The Louisiana Housing Corporation administers a variety of programs that assist renters, homebuyers and owners, developers, nonprofit groups, local governments and other stakeholders in creating safe, affordable, energy-efficient housing. LHC is a federally funded program that helps low-income households with their utility bills. They also help low- to moderate-income homebuyers attain 30-year, fixed-rate, low-interest mortgages. LHC helps renters obtain safe, affordable, community-based housing.
Here's the joint mortgage and housing assistance website maintained by the Consumer Financial Protection Bureau, Federal Housing Finance Agency and the Department of Housing and Urban Development.
Louisiana Debt Relief Programs: Healthcare
Trouble avoiding health care? Freeclinics.com provides a list of free and income-based medical and dental clinics around the State of Louisiana.
Louisiana Operation Round-Up: Many Louisiana utility companies participate in Operation Round-Up. Utility customers can volunteer to round up their monthly utility bills to the nearest dollar.
Despite what you might expect, however, Operation Round-Up does not actually help people with utility bills. Operation Round-Up provides for various other needs, including eyeglasses, hearing aids, handicap modifications, wheelchair ramps, medicine and food. Contact your utility company for details.
The Louisiana Children’s Health Insurance Program (LaCHIP): The Louisiana Children’s Health Insurance Program (LaCHIP) is a no-cost program that pays for hospital care, doctor visits, prescription drugs, shots, and other services to uninsured children up to age 19. The child may not currently have health insurance. Household income must be below certain limits to qualify, as well. Apply at the Louisiana Department of Health website or call 1-877-252-2447.
Councils on Aging: The Councils on Aging are administered by the Governor’s Office of Elderly Affairs through regional Council on Aging offices. One program, LouisianaSenioRx.org, connects low-income people with discount prescription drugs, direct from the pharmaceutical manufacturer.
Louisiana Debt Relief Programs: Food
Need food? Foodpantries.org maintains a list of food pantries to assist people with need.
Catholic Charities is an organization with regional offices throughout the United States. Catholic Charities provides all kinds of assistance to the needy, including food, housing, healthcare and prescription assistance.
St. Vincent de Paul and Catholic Charities are also particularly active in Louisiana. Here is the website for St. Vincent de Paul for the Baton Rouge area.
Louisiana Debt Relief Laws >>
The following is an overview of the main debt relief laws for Louisiana.
Louisiana Debt Relief Laws: Statute of Limitations (Prescriptive Period)
A debt is only valid for a certain amount of time called the statute of limitations. In Louisiana, the state of limitations is instead called a "prescriptive period." If a creditor doesn't sue you within this time frame, the debt goes away.
Here are some of Louisiana’s prescriptive periods for different kinds of debts and consumer-related issues:
- Credit cards - 3 years, per La. Civil Code Art. 3494
- Spoken contract - 10 years, per Antoine v. Franichevich, 167 So 98 (La. 1936)
- Written contract - 10 years, per La. Civil Code 3499
- Mortgage contract - 3 years, per La. Civil Code 3494
- Promissory Note - 5 years, per La. Civil Code 3498
- Judgment, Money Judgment or otherwise - 10 years, per La. Civil Code 3501
Louisiana Debt Relief Laws: Wage Garnishment
Here's the long and short of wage garnishment in the state of Louisiana.
Louisiana Wage Garnishment: The Short Version ...
Louisiana law limits the amount that can be garnished from a debtor's wages to no more than 25% of their disposable income, or the amount by which their disposable income exceeds 30 times the federal minimum wage.
Louisiana Wage Garnishment: The Longer Version ...
Here is a fuller explanation of Wage Garnishment: What is Wage Garnishment? How Much Money Can be Garnished from Your Paycheck? Wage Garnishment Calculator
Louisiana Modifications to the Garnishment Calculation
Federal law (what we were discussing above) provides an upper limit to your wage garnishment. State laws can't raise this cap, but they can lower it. That is to say, state law can give you some extra relief. Some states set a lower percentage limit for wage garnishment.
How long until the wage garnishment starts? State law also typically provides a grace period after the garnishment order is received. Louisiana law provides you with a brief grace period.
Louisiana Wage Garnishment Law Citations
Louisiana wage garnishment laws are found at various places in Louisiana law, including Louisiana Code of Civil Procedure Article 2411, the Louisiana Open Accounts Statute (La. R.S. 9:2781). Here's a link to the laws governing wage garnishment in the state of Louisiana.
Louisiana Debt Relief Laws: Homestead and Other Property Exemptions
Louisiana provides a number of personal property exemptions and exemption amounts for Louisiana residents' property. Exempted property is typically what is necessary for the exercise of a trade, calling, or profession. For more detail, see La. Revised Statute 13:3881.
Here is a list of "safe" or property exempted from seizure in Louisiana:
- Tools
- Instruments
- Books
- One utility trailer
- A firearm with a maximum value of $500
Here are personal property exemption amounts for Louisiana residents, as defined by Louisiana Revised Statutes, Title 20:
- Household items, including clothing, bedding, linen, chinaware, non-sterling silverware, glassware, living room, bedroom, and dining room furniture, etc.
- Family portraits
- Arms and military accouterments
- Poultry, fowl, and one cow
- Dogs, cats, and other household pets
- Wedding or engagement rings worn by either spouse not exceeding $5,000
- Federal earned income tax credit, except for seizure by the Department of Revenue or arrears in child support payments
- $7,500 value in household family vehicle
- $7,500 value in household family vehicle modified for disabled person
- Property insurance policy received as a result of damage caused by a gubernatorially declared disaster area
- Part of pension plans and retirements accounts
This list is not exclusive. Other exemptions may apply depending on your situation. Consult with a Louisiana lawyer for more information.
Louisiana Debt Relief Laws: Debt Collection Law
Collection agents must register with the Louisiana Secretary of State. Louisiana's debt collection law, called the Louisiana Consumer Credit Code, mirrors some of the rules in the FDCPA with three major exceptions.
Here are those three major exceptions to Louisiana's Debt Collection Law:
First, only original creditors are covered by Louisiana's collection laws. If your debt is bought by a third party, that debt buyer is not covered.
Second, collection agents may not contact any person about the debt that is not living or present in the debtor's household. This means the collection agent or original creditor cannot contact your employer or neighbor.
Third, a collection agent or creditor is limited in how they may contact a Louisiana resident. Once you send a written notice by registered or certified mail requesting the creditor cease communications, the creditor must comply and ceased communications. The creditor must stop communications once it receives a cease communications notice.
However, there are six exceptions to this cease communications rule. The creditor may do the following:
- Mail one notice per month
- Make up to four personal contacts with the purpose of settling the debt
- Contact any person to find what property the debtor has if the creditor has a judgment against the debtor
- Make an amicable demand for payment
- File a lawsuit for nonpayment
- Contact others if the debtor gives it permission to do so
To learn more about the Louisiana Consumer Credit Code, see La. Rev. Stat. Ann. § 9:3562, "Unauthorized Collection Practices".
Louisiana Debt Relief Laws: Bankruptcy
All the federal bankruptcy laws can be found online. This link provides access to the United States Bankruptcy Code.
Your local bankruptcy court and bankruptcy clerk of court are actually very helpful governmental entities. Your court is based on your location within the State of Louisiana. You are either in the United States Bankruptcy Court for the Western District of Louisiana, United States Bankruptcy Court for the Middle District of Louisiana, or the United States Bankruptcy Court for the Eastern District of Louisiana.
It's important to note that while these laws exist to protect consumers, they do not absolve them of their debts. If you are struggling with debt, it may be helpful to speak with a financial advisor or credit counselor to explore your options for debt relief.
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