Bankruptcy in Louisiana (2026): Exemptions & Means Test

Bankruptcy is a federal process, but what you keep when you file is largely set by Louisiana law. Louisiana has opted out of the federal bankruptcy exemptions, so most filers who have lived in the state long enough must use the Louisiana exemption system, which centers on a $35,000 homestead exemption. This page explains Louisiana's opt-out status, its homestead and other property exemptions, the Chapter 7 means test using current state income figures, and where Louisiana residents file. It is general legal information, not legal advice.

Information last verified on September 6, 2026. Exemption amounts and means-test income figures change periodically; confirm current amounts before relying on them.

Scope: This article explains how Louisiana exemptions and the federal means test apply to consumer bankruptcy. It is general legal information, not legal advice, and not a substitute for consulting a Louisiana bankruptcy attorney about your situation.

Does Louisiana Use State or Federal Bankruptcy Exemptions?

Louisiana has opted out of the federal bankruptcy exemptions. A debtor whose exemptions are determined by Louisiana law generally must use the Louisiana exemption list rather than the federal exemptions in 11 U.S.C. 522(d).

The federal Bankruptcy Code lets each state decide whether its residents may choose the federal exemption list. Louisiana is one of roughly 35 states that opted out, so the federal list in 11 U.S.C. 522(d) is unavailable to most Louisiana filers. Instead, you claim the exemptions provided by Louisiana statutes and constitution, along with certain federal nonbankruptcy exemptions such as Social Security.

Which state's exemptions apply turns on a residency rule. The Bankruptcy Code generally requires that you have been domiciled in a state for the 730 days (two years) before filing for that state's exemptions to apply. People who relocated recently may have to use a prior state's exemptions, so confirm your residency history with an attorney before assuming Louisiana rules apply.

The Louisiana Homestead Exemption

Louisiana protects up to $35,000 of value in a homestead, covering up to 5 acres in a municipality or up to 200 acres outside one. The full value is exempt where the debt arose directly from a catastrophic or terminal illness or injury (La. R.S. 20:1; La. Const. art. 12, sec. 9).

Louisiana's homestead exemption is a fixed dollar amount rather than the unlimited protection seen in some neighboring states. La. R.S. 20:1 exempts $35,000 in value of the bona fide homestead, which is the residence the owner occupies plus the land it sits on. The protected tract can be up to 5 acres if the home is inside a municipality, or as much as 200 acres if it is outside one, and the homestead may be rural or urban.

There are notable wrinkles. A married couple may claim only one homestead, so the $35,000 is not doubled simply by both spouses filing. The exemption also extends to surviving spouses and minor children. Importantly, the dollar cap does not apply at all when the obligation arose directly as a result of a catastrophic or terminal illness or injury; in that situation the full value of the homestead is exempt, a protection aimed at medical-debt cases.

The homestead exemption does not stop foreclosure of a mortgage you signed or a sale for certain liens against the property. As with every state, a voluntary mortgage remains enforceable. There are also special rules protecting property-insurance proceeds held in escrow after a governor-declared disaster.

Vehicle, Personal Property, Wages, and Other Exemptions

Louisiana exempts $15,000 of equity value in one motor vehicle for any purpose, with a second vehicle up to $15,000 for a married debtor or one with a licensed-driver child in the household, or $20,000 for a vehicle modified for a person with a disability, most clothing and household goods, family portraits, musical instruments, and firearms/arms up to $2,500, wedding or engagement rings up to $5,000, and necessary tools of the trade (La. R.S. 13:3881).

The Louisiana motor-vehicle exemption under La. R.S. 13:3881 protects $15,000 in equity value for one motor vehicle for any purpose. Acts 2026, No. 55, effective August 1, 2026, raised that amount from $7,500 and added a second-vehicle exemption: where the disability-vehicle exemption does not apply, a debtor who is married or who has a child in the household who is a licensed driver may exempt a second motor vehicle with an equity value not exceeding $15,000. A vehicle substantially modified, equipped, or fitted to adapt its use to the physical disability of the debtor or a family member is exempt up to $20,000 in equity value instead. In no case may a debtor claim more than two exempt vehicles. Equity value is based on the retail value set forth in the JD Power Official Used Car Guide for the particular year, make, and model.

The same statute exempts a broad list of personal property: clothing, household goods, non-sterling silverware, family portraits, arms and military accoutrements, musical instruments, and firearms and ammunition up to $2,500; wedding or engagement rings not exceeding $5,000; and poultry, fowl, and one cow for family use. Necessary tools, instruments, and books used primarily for the debtor's trade, along with one utility trailer, are also exempt as trade implements (La. R.S. 13:3881); a former subsection that would have exempted a firearm as a trade implement was repealed by Acts 2014, No. 322, Section 2. Most pensions, annuities, and qualified retirement plans are exempt as well, subject to limits on contributions made shortly before filing. The same 2026 amendment added health savings accounts to that exempt list, capped at the annual Internal Revenue Service deduction limit for family coverage for the current calendar year (La. R.S. 13:3881(D)).

Wages are protected through Louisiana's garnishment cap. Under La. R.S. 13:3881, the debtor may exempt, for any week, the greater of 75% of weekly disposable earnings or 30 times the federal minimum wage. Louisiana does not provide a broad cash wildcard exemption, so the specific categories above do the work of protecting personal property.

The Chapter 7 Means Test in Louisiana

For cases filed on or after July 15, 2026, the Louisiana median family income is $59,447 for 1 earner, $72,348 for 2, $84,602 for 3, and $103,628 for a family of 4. The U.S. Trustee Program updates these figures about twice a year (justice.gov/ust).

The means test decides whether you can file Chapter 7. It compares your household's current monthly income, annualized, to the median family income for a Louisiana household of your size. If your income is at or below the Louisiana median, you generally pass and may proceed under Chapter 7. If it is above the median, you complete a second calculation that subtracts allowed expenses to determine whether you have meaningful disposable income; if you do, Chapter 7 may be presumed abusive and Chapter 13 may be the route instead.

The current Louisiana median family income figures published by the U.S. Trustee Program, for cases filed on or after July 15, 2026, are:

For households larger than four, the U.S. Trustee Program adds a set amount per additional person. These figures are derived from Census Bureau data and revised roughly twice a year, typically in spring and fall, so always confirm the current numbers for your filing date.

Chapter 7 vs. Chapter 13 and the Automatic Stay

Chapter 7 discharges most unsecured debts after a trustee liquidates any nonexempt property; Chapter 13 keeps your property in exchange for a three-to-five-year repayment plan. Both trigger the automatic stay, which immediately halts most collection, foreclosure, and garnishment.

Chapter 7 is a liquidation. A trustee can sell property not protected by an exemption and distribute the proceeds to creditors, then most remaining unsecured debts are discharged, usually within a few months. Louisiana's homestead and vehicle exemptions let many filers keep their home and car in Chapter 7 as long as equity falls within the limits.

Chapter 13 is a reorganization for people with regular income who want to catch up on a mortgage or car loan, who have nonexempt assets they want to keep, or who do not qualify for Chapter 7. You repay some or all of your debts through a court-approved plan lasting three to five years and receive a discharge when you complete it.

The moment you file either chapter, the automatic stay under 11 U.S.C. 362 takes effect. It stops most collection calls, lawsuits, wage garnishment, and foreclosure or repossession activity while your case proceeds. Some obligations, such as certain domestic-support actions, are not stayed.

Where Louisiana Residents File

Louisiana has three federal bankruptcy courts: the Eastern District (New Orleans), the Middle District (Baton Rouge), and the Western District of Louisiana. You file in the district serving your parish.

Unlike most states, Louisiana is divided into three bankruptcy districts. The Eastern District covers the New Orleans area and southeastern parishes, the Middle District covers the Baton Rouge area, and the Western District covers the rest of the state, including Shreveport, Lafayette, and Lake Charles. You generally file in the district and division serving the parish where you have lived for most of the 180 days before filing. Before filing, you must complete an approved credit-counseling course, and before discharge, a debtor-education course.

What Bankruptcy Can and Cannot Do

Bankruptcy discharges most unsecured debts such as credit cards and medical bills, but it generally does not erase most student loans, recent income taxes, child support, or alimony.

A discharge wipes out personal liability for most general unsecured debts, including credit cards, medical bills, and many personal loans. It does not eliminate most student loans (absent a separate undue-hardship showing), recent income tax debts, domestic-support obligations like child support and alimony, most government fines, or debts from fraud. A mortgage or car loan can be discharged as a personal obligation, but the lender keeps its lien, so you must keep paying if you want to keep the collateral.

Because Louisiana's homestead has special rules for medical debt and joint owners, and because the means test figures update periodically, it is worth reviewing your situation with a licensed Louisiana bankruptcy attorney before filing. The figures on this page were verified in September 2026 and should be confirmed against the current statutes and U.S. Trustee Program tables.

This is general legal information, not legal advice. Exemption statutes and means-test income figures change; the amounts here were verified in September 2026. Confirm current figures and how they apply to you with a licensed Louisiana bankruptcy attorney.

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