Bankruptcy filings always take place in federal court because bankruptcy falls under the jurisdiction of federal law in every single state across America. However, Louisiana state law isn't completely off the table. It may still matter in certain places along the way, especially when deciding what assets that you own are or aren't protected from a liquidation or forced sale.

Chapter 7 bankruptcy is a legal proceeding created in order to free a person from their unsecured debt obligations when they are facing serious financial problems. However, it doesn't automatically rid the filing individual of secured debt backed by collateral like car payments, mortgages or secured credit lines. This form of bankruptcy, since it's faster, more common and less complicated than a Chapter 13 filing, is frequently called a liquidation or straight bankruptcy. Understandably, many people are initially quite worried about the idea of filing for Chapter 7 due to the fear of asset sales, but the liquidation of any personal or household items can often can be prevented if you pass the bankruptcy means test covered in the next step below. Even if you ultimately decide against a Chapter 7 filing, a Chapter 13 restructuring may still be able to help you get the relief you're looking for.

Passing the means test is essential to declaring Chapter 7 bankruptcy. In fact, it's required. To pass, you must prove that your total family income is not more than Louisiana's state median. Though this median is published by the Census Bureau, it does vary depending on the size of your household. The following maximum incomes apply for cases filed after March 15, 2009http://research.lawyers.com/Louisiana/Bankruptcy-in-Louisiana.html:

1. Single individual: $36,945
2. Two person family: $46,741
3. Three person family: $52,628
4. Four person family: $66,634
5. Five+ person family: $66,634 plus $6,900 for each extra individual over four

When seriously contemplating filing for chapter 7 bankruptcy in Louisiana, it's vital that you consult with a bankruptcy attorney as soon as you can. They will help you work through which exemptions you may have a right to claim. Once you have confirmed that you are allowed to declare chapter 7 bankruptcy after passing the means test detailed above, your attorney will decide on a strategy to keep as many of your assets out of liquidation as possible (and in many cases all of them). That being said, here are a just a few of the exemptions allowed in Louisiana under the 2009/2010 guidelines:http://research.lawyers.com/Louisiana/Bankruptcy-in-Louisiana.html

1. Motor vehicle to $7,500
2. Property necessary to exercise trade, calling or profession limited to tools, instruments, books and $7,500 for one motor vehicle, one utility trailer and one firearm up to $500.
3. Property you occupy to $25,000
4. Clothing, bedding, linen, chinaware, nonsterling silverware, glassware, furniture, appliances and equipment for required therapy
5. One utility trailer
6. Family portraits
7. Musical Instruments
8. One firearm to $500
9. Wedding rings to $5,000
10. Proceeds of life insurance policy
11. Property dedicated for cemetery purposes