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.
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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.
READ MORE: How to consolidate your credit card debt
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.
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
- 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
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
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.
READ MORE: Debt management vs. debt settlement
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
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.
READ MORE: State statutes of limitations on debt
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|
|Median household income||$53,571||$70,784|
|Per capita household income||$30,340||$36,430|
|Auto loan debt||$22,551||$26,438|
|Credit card debt||$5,811||$6,194|
|Median mortgage payment (30-year fixed)||$1,349||$2,823|
|Average student loan debt||$34,525||$37,338|
|FICO credit score||689||714|
|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|
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.