2024 Guide to Debt Consolidation and Relief in Louisiana

Louisiana is known for letting the good times roll, but that comes at a cost. Louisiana has the third-highest average credit card debt in the U.S. with an average balance of $5,398.

The Pelican State also ranks 47th in average household income, with an average of $76,000 annually. The combination of high debt totals and low income means plenty of the state’s residents are struggling.

Table of Contents

How to Become Debt-Free in Louisiana

Louisiana residents have four primary ways to get out of debt.

1. Debt Consolidation Loan

Works best for: People with 670+ credit scores

Debt consolidation loans involve using a new, larger loan to pay off your other unsecured debts, including credit cards. A debt consolidation loan should typically have a lower interest rate than your current debts to be effective.

This leaves you with one monthly payment and one creditor, saving money and simplifying your payments.

2. Debt Consolidation Company / Debt Consolidation Program

Works best for: Anyone with more than $10,000 in unsecured debt who is struggling to make their payments and wants to avoid bankruptcy.

Debt settlement involves negotiating with creditors to repay less than the total amount they owe, sometimes as a lump sum and sometimes as a longer-term payment plan.

In Louisiana, debt settlement can help you pay off different forms of consumer debts, including:

Credit cards/lines of credit
Personal loans
Department store cards
Old judgments
Student loans in default
Other unsecured loans or debts

Pro tip: To make debt settlement work, you must stop paying your debts for three to six months until your creditor charges off the debt. This will damage your credit score but will incentivize the creditors to negotiate. Once settlements are reached, and payments are made, your credit score will rebound.

The average debt settlement customer ends up debt-free while paying about 75% to 80% of the total enrolled in the program after all fees are paid.

Debt Settlement Risks

Your creditors aren’t obligated to settle
If a creditor refuses to settle, you could end up having to pay accrued interest and late fees
Missed payments will show up on your credit report
You may have to report the forgiven amount as income tax to the IRS

Louisiana Debt Consolidation Companies

Looking for a debt consolidation agency to help you get a handle on debts? Here are a few firms that could help:

Best Overall: DebtHammer

DebtHammer helps borrowers overwhelmed by unsecured debts ranging from payday loans and tribal loans to credit cards and medical bills.

After a free consultation to review your situation, the DebtHammer representative will offer you a menu of options. You will decide on the course of action you prefer. These options may include debt settlement, debt consolidation, bankruptcy or others. DebtHammer requires a minimum debt of $7,500 for program enrollment or $1,000 in payday loans. The company charges 25% of the total enrolled debt.

READ MORE: DebtHammer review

Though based in Texas, DebtHammer currently provides solutions to residents of Louisiana, Alabama, Alaska, Arizona, Arkansas, California, Delaware, Florida, Georgia, Illinois, Kansas, Maine, Massachusetts, Michigan, Montana, Nebraska, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wyoming. Some service options may not be available in all states.

Click here to schedule a free consultation.

More Louisiana Debt Relief Companies

Alleviate Financial Solutions 4 Park Plaza Suite 1500, Irvine, CA 92614 (800) 308-2935 alleviatefinancial.com
Guardian Litigation Group: 17922 Fitch Suite 150, Irvine, CA 92614 (949) 312-4226 guardianlit.com
New Era Debt Solutions: 330 Wood Rd., Suite B Camarillo, CA 93010 (805) 303-8773 neweradebtsolutions.com
Global DS 675 W Indiantown Rd. Jupiter, FL 33458-7555, (866) 677-5044 globaldsgroup.com
InCharge Debt Solutions: Orlando, FL (800) 565-8953 incharge.org
Golden Financial Services Debt Settlement Corporation: Lake Worth, FL, (619) 600-5189 goldenfs.org
National Debt Relief 180 Maiden Ln 30th floor, New York, NY 10038 (800) 300-9550 nationaldebtrelief.com
DebtBlue: 1125 E Campbell Rd Suite 200, Richardson, TX 75081 (855) 269-9462 try.debtblue.com

Louisiana Debt Settlement Attorneys

Grand Law Firm: 10537 Kentshire Ct APT A, Baton Rouge, LA; (225) 314-8883; www.grandlawfirm.com
E. Orum Young Law: 200 Washington Street, Monroe, LA; (318) 407-3669
freshstart.eorumyoung-bankruptcylaw.com
Sisk Law Firm: 3421 N Causeway Blvd # 503, Metairie, LA; (504) 799-9987; sisklawfirm.com
Lexington Law: 401 Whitney Ave. #126, Gretna, LA; (855) 255-0139; www.lexingtonlaw.com
Kirkpatrick & Associates LLC: 3501 N Causeway Blvd # 750, Metairie, LA; (504) 828-3311; www.kirkpatrickandassociates.com
McBride Law Firm: 301 Jackson St Suite 101, Alexandria, LA; (318) 625-0471; www.tommcbridelaw.com
L.W. Thomas & Associates: 201 E Cypress St, Lafayette, LA; (337) 235-8801; www.bankruptcylawlafayette.com
Sam Henry IV Attorney At Law – Louisiana Bankruptcy Attorneys: 502 Trenton St, West Monroe, LA; (318) 322-7655; samhenrylaw.com
Attorney William G. Cherbonnier, Jr.: 2550 Belle Chasse Hwy, Gretna, LA; (504) 309-3304; www.billcherbonnier.com
Gerdes Law Firm LLC: 106 N Cypress St, Hammond, LA; (985) 345-9404; www.gerdeslaw.net
Diment & Associates: 2644 S Sherwood Forest Blvd #108, Baton Rouge, LA; (225) 341-7433; dimentfirm.com
Pontchartrain Law Center: 3525 N Causeway Blvd #719, Metairie, LA; (504) 831-7405; www.pontchartrainlaw.com
L. Laramie Henry – Bankruptcy Attorney: 1227 MacArthur Dr, Alexandria, LA; (318) 445-6000; henry-law.com
Harrington & Myers: 2901 N Causeway Blvd Suite 303, Metairie, LA; (504) 831-9724; Swamplaw.com
James W. Spivey II: 1515 N 7th St, West Monroe, LA; (318) 387-3666; jspiveylaw.com

Eligible Debts

When seeking debt relief in Louisiana, it’s important to note that not all types of debt are eligible. Debts that can be included in the state’s debt settlement programs include:

Credit cards
Department store cards
Signature loans
Personal lines of credit
Old repossessions
Other unsecured debts
Old judgments
Private student loans in default

Ineligible Debts

Debts that don’t typically qualify for debt settlement include:

Home mortgages
Federal student loans
Car loans
Other secured debts
Credit Union debts
Medical bills

3. Debt Management

Works best for: People with primarily credit card debt. Many credit counseling agencies work exclusively with credit card debt (and thus won’t be a help if you need to consolidate medical bills or student loans.)

A debt management program will usually reduce the interest rates on your credit cards from the current average of about 20% to somewhere around 9%. This will lower your monthly payment. However, unlike debt settlement, you will repay the full amount you owe, plus a lower amount of interest. The program usually takes 3-5 years to complete.

Pro tip: It’s important to note that only 55% to 70% of customers who enroll in DMPs successfully complete the program. If you enroll in a Debt Management Plan but don’t complete it, your financial situation could worsen.

So, for example, if you had $5,000 in credit card debt and were paying 25% interest, your monthly interest rate would be $105. If you reduce the interest to 8%, you’ll pay $33 a month in interest. That’s a $72 savings that you could apply to reducing your debt and paying it off faster.

These programs are usually set up and administered by nonprofit credit counseling agencies.

Like with debt settlement, debt management does not involve a loan. Credit scores won’t matter. But if you default on payments, your creditor could raise the interest rate back to its original amount.

Credit Counseling Agencies in Louisiana

Kingdom Credit Consulting Agency: (800) 732-4997
Consumer Credit Counseling Services: New Orleans; (504) 702-6964
Mustard Seed Financial Services, LLC: 9800 Airline Hwy Suite 221 West Entrance 1st Floor, 9800 Airline Hwy, Baton Rouge, LA; (225) 325-3915
Diamond Credit Repair LLC: (877) 803-4266
Louisiana Credit Repair and Financial Planning Group: (225) 305-2213
The Best Credit Group: 1001 W Pinhook Rd #209, Lafayette, LA; (337) 783-0108; www.thebestcreditgroup.com
A1 Credit Fox: (318) 709-2761
Credit Care 360: (985) 269-3006; creditcarethreesixty.com

4. Bankruptcy

Works best for: People who can see no other way to get out of debt within the next five years, who’ve already suffered significant credit score damage or who’ve tried one or more of the other options and failed.

There are two types of bankruptcy:

Chapter 7: Your non-exempt assets are liquidated by a court-appointed trustee and the money is used to repay your debts. Some assets are exempt, including Social Security, your home, pensions and your car.
Chapter 13: You keep your assets but are on a payment plan to make regular payments toward your debt. All of the repayments go through your bankruptcy trustee.

Here are Louisiana’s household income levels for bankruptcy cases filed on or after May 15, 2023.

One-person household: $53,028
Two-person household: $64,762
Three-person household: $73,393
Four-person household: $91,366
Five-person household: $101,266
Six-person household: $111,166
Seven-person household: $121,066
Eight-person household: $130,966
Nine-person household: $140,866

READ MORE: Types of bankruptcy explained

Louisiana Bankruptcy Exemptions

In Louisiana, married couples filing jointly can each claim a full exemption for most property that they own together. This is called doubling. Married couples can’t, however, double the homestead exemption, which we will discuss below.

Homestead: Up to $35,000 in equity your home and the land where it sits
Personal property: Filers can protect household goods and furnishings, appliances, clothing, family portraits, pets, one cow and military accoutrements, as long as they are being used by a family member.
Transportation: Filers can protect up to $7,500 in one vehicle that is in use by you or your family.
Miscellaneous exemptions: Tools of your trade and all property of minor children are protected without limit.
Money: You can protect up to 75% of disposable earnings or 30 times the federal minimum wage, whichever is higher. You can also protect any Federal Earned Income Tax Credit.
Insurance: Filers can protect some life insurance policies and other insurance benefits, including proceeds for claims on exempt property that has been damaged by a natural disaster.

Debts that Aren’t Discharged by Chapter 7 Filings

Nondischargeable debts include alimony and child support, some taxes and fines, some student loans, debts for death or injury caused by driving while intoxicated, and any debts you fail to disclose in your bankruptcy petition.

Bankruptcy will stay on your credit report for seven to ten years and could knock your credit score down by as much as 200 points.

However, that does not mean you won’t be able to borrow money for that entire period. As years pass, lenders will be more forgiving and you’ll have a better shot at loan approval.

What is the Statute of Limitations on Debt in Louisiana?

The statute of limitations is how long a creditor can take you to court to collect unpaid debts. This period begins as soon as you miss the initial payment on a debt that’s due.

Oral agreements: 10 years
Written contracts: 10 years
Promissory notes: 10 years
Open-ended accounts: 3 years

The statute of limitations is 3 years for medical debt, auto loans, mortgages, and private student loans. State taxes have no limit.

For more information, contact: Louisiana Attorney General Office

After the statute of limitations expires, the debt becomes “time-barred.” This means the original creditor can no longer collect on it. At this point, the court can’t order you to repay the debt either. Debt collectors also can’t garnish your wages or place a lien on your car or home.

You’ll still legally owe these debts. Also, debt collectors can still contact you via phone or letter to get you to pay.

Debt Collection Laws in Louisiana

The federal Fair Debt Collection Practices Act provides protections guaranteeing that debt collectors treat Louisana residents fairly. The Louisiana Fair Debt Collection Practices Act supplements the FDCPA to include additional protections for state residents.

The Louisiana Fair Debt Collection Practices Act:

Prohibits debt collectors from contacting third parties who do not reside in the same household
Allows debt collectors to contact third parties for details about the debtor, provided that no information about the debt itself is disclosed.
Requires the debt collector to limit mail contacts to one per month, but only if the debtor has sent a written request by certified mail that requests limited communication. However, this does not prevent the debt collector from taking legal action against you.
If you’ve requested limited communication, any debt collector who obtains a judgment against you is allowed to resume contact.
Debt collectors are not prohibited from contacting people to for information about property that may be seized to satisfy a debt after judgment.

Under the FDCPA, neither creditors nor debt collectors can:

Use deceptive, abusive, fraudulent, or manipulative tactics to collect debts.
Use force or violence to get borrowers to pay their debts
Contact a borrower’s employer about a past-due account unless a prior agreement was made or they have a judgment
Sell or otherwise disclose private information to a third-party agency
Harass borrowers at home or work about the debt
Contact borrowers outside of standard business hours (9:00 p.m. to 8:00 a.m.) without consent
Intentionally misrepresent information

You have the right to contact a debt collector and tell them to stop contacting you, but it must be done in writing.

Debt collectors and creditors must also provide written notification with details relating to the debt within five days of contacting the borrower. If you’ve been contacted about a debt you might not owe, you have 30 days to dispute it with a debt verification letter. In the letter, write that you don’t owe the debt and that they must provide written proof before anything else happens. However, if the collector sends you proof that you owe the debt, the debt collector is allowed to resume collection efforts.

If you owe several debts, any payment you make must be applied to the debt you choose. A debt collector is not allowed to apply your payment to any debt you believe you do not owe. If you believe the law was violated, you have the right to sue a debt collector in a state or federal court.

Where to Make a Complaint in Louisiana

The best place to register a complaint about a payday lender in Louisiana is with the Office of Financial Institution’s Non-Depository Division. Here’s what you need to know to get in touch with them:

Regulator: Non-Depository Division of the Louisiana Office of Financial Institutions
Address: Post Office Box 94095, Baton Rouge, LA 70804-9095
Phone: (225) 925-4660 or (888) 525-9414
Link to website: http://www.ofi.state.la.us/complaints.htm

You can also submit a complaint to the Consumer Financial Protection Bureau (CFPB). The CFPB is a federal organization created to protect consumers against abuse from financial institutions, including payday lenders.

More Louisiana Debt Statistics

	Louisiana average	National average
Average salary	$50,940	$59,428
Median household income	$53,571	$70,784
Per capita household income	$30,340	$36,430
Unemployment	3.3%	3.5%
Household debt	$45,830	$59,580
Auto loan debt	$22,551	$26,438
Credit card debt	$5,811	$6,194
Mortgage debt	$171,415	$236,443
Median mortgage payment (30-year fixed)	$1,349	$2,823
Average student loan debt	$34,525	$37,338
FICO credit score	689	714
Average VantageScore	667	701
Retirement savings	$386,908	$255,000
Child poverty	26.34%	5.2%
Overall poverty	18.6%	11.6%
Bankruptcies in 2021	1613	89,224
Foreclosures in 2022	1,873 (First six months of 2022)	248,170
Identity thefts reported	24,898	1,108,609
Percentage of unbanked residents	8.1%	25.6%
Average credit utilization ratio	30%	31%

Payday lending status in Louisiana: Legal

Maximum loan amount: $350
Maximum Interest Rate (APR): 697.41% on a 14-day loan of $100
Minimum loan term: N/A
Maximum loan term: 30 days
Number of rollovers allowed: None unless the borrower pays 25% of the advance plus fees
Number of outstanding loans allowed: Any
Installment option: Once every 12 months
Cooling-off period: None
Finance charges: 16.75% of the advanced amount capped at $45, plus one $10 documentation fee. Once in default, 36% interest for the first year and 18% for the second year. One non-sufficient funds (NSF) fee.
Criminal action: Prohibited

Debt Resources for Louisiana Residents Facing Hardship

Louisiana offers a variety of local and state programs for residents looking for help with debt or finances. Among other things, these resources can provide low-cost or free childcare, job-related education and training, healthcare, and legal aid. Some programs can also help with the cost of rent or utilities.

Some of the main food banks in the state include:

Food Bank-Northwest Louisiana: 285 Mt Zion Rd, Shreveport, LA; (318) 675-2400
Food Bank of Northeast Louisiana: 4600 Central Ave, Monroe, LA; (318) 322-3567
Food Bank of Central Louisiana: 3223 Baldwin Ave, Alexandria, LA; (318) 445-2773
Second Harvest Food Bank: 700 Edwards Ave, New Orleans, LA; (504) 734-1322
NOM Food Pantry @ GHR: 31294 U.S. Hwy 190 4th Building, Lacombe, LA; (985) 238-6786
Southeast Food Pantry: 105 Highland Park Entrance, Covington, LA;
Joe LeBlanc Food Pantry: 814 Constable St, Minden, LA; (318) 299-6375
Greater Baton Rouge Food Bank: 10600 S Choctaw Dr, Baton Rouge, LA; (225) 359-9940
Foodnet Food Bank of Lafayette, LA: 403 Ambassador Caffery Pkwy, Scott, LA; (337) 232-3663
City Of Kenner Food Bank: 317 Oxley St, Kenner, LA; (504) 468-7220
Faith & Friends Food Pantry: 4009 Legion St, Lake Charles, LA
Tangi Food Pantry: 2410 W Thomas St, Hammond, LA; (985) 429-8551
Washington Parish Food Bank: 2208 Washington St, Franklinton, LA; (985) 322-2017
Noel Neighborhood Ministries Food Pantry: 520 Herndon St, Shreveport, LA; (318) 424-0434

How to Apply for Unemployment Benefits in Louisiana

State law sets qualifying requirements in three main areas: your past wages, your job separation, and ongoing availability and work search requirements. You must meet all of the following qualifying requirements in order to receive benefits.

Past wages: You must have earned enough wages in your base period. The base period is the first four of the last five completed calendar quarters before you filed your claim.
Reason for separation from your last job: You must be unemployed or partially unemployed through no fault of your own in order to receive benefits.
Ongoing availability and work search: You must be physically able and available to work. You must also be actively seeking work.

For more detailed information refer to the Benefit Rights Information.

To file a claim, contact the UI Call Center at 1-866-783-5567 file online.

Before filing a claim, you will need the following information:

Social Security number
Names, addresses, job-site locations and telephone numbers of employers for whom you have worked during the last 18 months
Name and local number of union hall
Alien registration number
The member-4 copy of your DD214 if you served in the military during the last 18 months
Your SF-8 and SF-50 if you worked for a federal employer during the last 18 months.

State Hardship Programs

Louisiana offers a number of programs to help people facing financial hardship, with a big focus on families who have faced natural disasters.

Some of the programs include:

FEMA Individuals + Households Program (IHP): This provides financial assistance to individuals and households affected as a direct result of a Presidentially declared major disaster or emergency.
Crisis Counseling Assistance and Training Program: The program offers mental health assistance and training activities, providing short-term interventions to mitigate stress, provide emotional and other support to help survivors in their recovery process.
Disaster Unemployment Assistance (DUA): This provides unemployment benefits and reemployment services to individuals who have become unemployed as a result of a major disaster and who are not eligible for regular State unemployment insuranc.
Disaster Legal Services: This provides legal help for low-income individuals who are unable to secure legal services adequate to meet their disaster-related needs.
CHIP: Children’s Health Insurance Program is designed to help low-income families obtain affordable health care for their children. It includes certain services, like medicine and hospital care.
TANF: The Temporary Assistance for Needy Families (TANF) program provides temporary financial assistance for pregnant women and families with one or more dependent children. TANF provides financial assistance to help pay for food, shelter, utilities, and expenses other than medical.
SNAP: SNAP is available to help low-income households subsidize their food costs. Apply for a reloadable card and use it like you would a debit card at most grocery stores.
WIC: The Women, Infants and Children program is designed to help certain people, including low-income women with young children, afford food costs. Most people who qualify for SNAP or TANF benefits also qualify for this program.
LIHEAP: The Low-Income Home Energy Assistance Program is federally funded and helps income-qualified families with heating and cooling costs.
CAFCP: The federal Child and Adult Food Care Program reimburses eligible organizations and daycare home providers for nutritious meals served in care settings. The program is administered by the U.S. Department of Agriculture.

Cost of Living in Louisiana

Annual Mean Wage (All Occupations)	$52,087
Median Monthly Rent	$867
Value of a Dollar	$1.11
Cost of Living	92
Cost of Living Rank	36
Grocery Cost Index	95.1
Housing Cost Index	84.7
Utilities Cost Index	85.3
Transportation Cost Index	97.2
Miscellaneous Cost Index	96.3

Source: World Population Review (updated October 2023)

The Bottom Line

Louisiana ranks near the top for per-capita credit card debt, but low on the list of average wages. The state also has an exceptionally high poverty rate. This means many of the state’s residents are likely juggling more debt than they can afford.

If you’re struggling, now is the time to take action. Your situation will only continue to worsen as overdraft fees, late fees and interest charges mount.

2023 Guide to Debt Consolidation and Relief in Louisiana