Home to approximately 4,624,047 people, many Louisiana residents struggle with consumer debt. A recent study found that the state’s estimated poverty rate is 19.6% and that the average Louisiana resident owes about $39,740 in household debt. Considering the average household income is about $50,800 — far below the estimated real median income of $71,186 — it’s no wonder that many Louisianians are seeking debt relief.
If you’re a Louisiana resident who needs debt relief or other financial help, here’s what you should know.
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Louisiana debt statistics
Here are the most recent debt statistics for Louisiana:
- Average household debt: $39,740
- Average student loan debt: $34,525
- Average credit score: 689
- Median mortgage payment: $1,267
- Bankruptcies: 12,599 in 2019
- Personal income: $47,740
- Child poverty: 26.8%
- Unemployment: 3.3%
Debt collection laws in Louisiana
Louisiana complies with the federal guidelines outlined in the Fair Debt Collection Practices Act (FDCPA). The FDCPA regulates third-party debt collectors within the United States. It prohibits debt collectors from:
- Engaging in unfair or deceptive debt collection practices
- Harassing a debtor (person who owes the debt)
- Calling an individual without immediately identifying themselves and their reason for calling
- Threatening that the debtor will serve jail time
- Claiming they will take any form of legal action against the debtor that they do not actually intend to take
- Pretending to be a government agent, lawyer, or other official representative
- Lie about the amount owed or about the current status of the debt
Louisiana also has its own laws about debt collection under the Louisiana Fair Debt Collections Practices Act. These laws also regulate debt collectors and creditors in the state, as well as how they can engage with individuals to try to collect the money owed.
The Act includes things like:
- If an individual has defaulted and given the creditor written notice via certified mail, the creditor may only contact the debtor once a month or less.
- A creditor may contact anyone without the debtor’s consent, but only to gain relevant information about things like their credit and location.
- Creditors may reach out to a maximum of four personal contacts to try to collect a debt, but they may not use threatening or deceptive tactics.
- Debt collectors can inquire into the details of a property or asset that could be seized to satisfy a debt (after filing a lawsuit or a judgment has been made against the debtor).
Debt relief options for Louisiana residents
If you’re struggling to get a handle on your debts, here are some of the best ways to find debt relief in Louisiana:
- Debt settlement: Debt settlement is the process of negotiating with your creditors to reduce how much you owe on an account. It’s typically done through a debt settlement agency and may require you to stop making payments on your debt until the process is finished.
- Debt consolidation loans: Debt consolidation loans let you combine multiple high-interest debts into one loan with one monthly payment. Doing this can make it easier to manage payments. Depending on your credit score, it could also reduce how much you pay in interest.
- Debt management plan: Offered through nonprofit credit counseling companies, a DMP can also help if you’re dealing with overwhelming amounts of debt. When you enroll in a DMP, a credit counselor works on your behalf to negotiate better terms and reduced monthly payments with your creditors. DMPs typically last three to five years.
- DIY plans: If you’re good at negotiating, you can speak with your debt collectors to negotiate your debts. You may be able to set up a new repayment plan that works with your budget, waive late fees, lower interest rates, and more.
- Bankruptcy: Although filing for bankruptcy is a last resort, it could give you a fresh start if you’re drowning in debt. Speak with a bankruptcy attorney before you file. They can advise you on whether it’s a good idea, as well as whether you can qualify for a Chapter 7 or a Chapter 13 bankruptcy.
To learn more about bankruptcy costs and qualifications in Louisiana, check out this video:
Debt settlement in Louisiana
Debt settlement is one strategy to pay off your debts, particularly if you’re unable to make multiple monthly payments or have fallen behind on bills.
Most people do it through a debt settlement agency, though you can also do it yourself if you have good negotiation skills. In Louisiana, most unsecured consumer debts can be settled this way, including:
- Credit cards
- Personal lines of credit
- Department store cards
- Personal loans
- Old judgements
- Student loans in default
- Other unsecured debts
If you choose to go through a professional agency, you can expect it to take two to four years to successfully settle debts. The agency is legally required to inform you about the expected timeline before trying to negotiate with your creditors. They must also tell you how much money you’ll need to pay each month before they can make an offer to your creditors.
Many debt settlement companies will suggest you stop making payments to your creditors to help improve the odds of success. This can cause damage to your credit score. It may also result in additional late fees or interest charges on your account. Only quit making payments after considering the potential risks.
Keep in mind that debt settlement is not a guarantee. If a company promises to make any debt disappear, it’s probably a scam.
Louisiana debt settlement companies
Here are some debt settlement companies in Louisiana:
- Consumer Debt Counselors: (225) 295-0212, 13001 Justice Ave Baton Rouge, LA, 70816
- Mark Credit Corporation: (337) 889-3730, 3816 W Congress St STE 1 Lafayette, LA, 70506
- Optimal Debt Solutions: (844) 757-9683, 107 Belmont Dr Thibodaux, LA 70301
- Money Management International: (504) 592-0277, 650 Poydras St Suite 1400 New Orleans, LA 70130
- ASAP Credit Repair: (337) 417-9300, 3527 W Pinhook Rd Lafayette, Louisiana 70508
- New Era Debt Solutions: (844) 891-4227
Debt settlement attorneys
If you’re looking for legal assistance with debt settlement in Louisiana, here are some of your best options:
- Sisk Law Firm: (504) 608-6360,3421 N Causeway Blvd Ste 503 Metairie, LA 70002
- Simon Fitzgerald LLC.: (318) 542-7825, 4700 Line Avenue, Suite 200 Shreveport, LA 71106 (multiple locations throughout LA)
- E. Orum Young Law: (318) 450-3192, 200 Washington Street Monroe, LA 71201
- McBride Law: (318) 625-0471, 301 Jackson Street Suite 101 Alexandria, LA 71301
- Grand Law Firm: (225) 314-8883, 10537 Kentshire Court, Suite A, Baton Rouge, LA 70810
Debt resources for Louisiana residents facing hardship
Louisiana offers multiple debt relief programs and resources for people facing financial hardship. Many of these resources are available at the state level, but some are also federally funded. Examples include:
- Rental assistance
- Utility bill assistance
- Childcare programs
- Health care services
- Food and nutrition programs
Right now, approximately 49% of Americans are struggling with the cost of food. Fortunately, Louisiana has a number of food pantries and food banks to make sure every household has healthy food. Here are some of the main ones:
- Food Bank of Central Louisiana: 3223 Baldwin Avenue, Alexandria, LA 71301; (318) 445-2773
- Second Harvest Food Bank of Greater New Orleans and Acadiana: 700 Edwards Avenue, New Orleans, LA 70123; (504) 734-1322
- Food Bank of Northeast Louisiana: 4600 Central Avenue, Monroe, LA 71203; (318) 322-3567
- Greater Baton Rouge Food Bank: 10600 S. Choctaw Drive, Baton Rouge, LA 70815; (225) 359-9940
- Food Bank of Northwest Louisiana: 285 Mt. Zion Rd. Shreveport, LA 71106; (318) 675-2400
For more information on getting help with food and nutrition, head over to Feeding America.
Income and employment in Louisiana
At the height of the COVID-19 pandemic, Louisiana’s unemployment rate rose to 13.5% in 2020. Since then, it has steadily decreased to 3.3% (as of October 2022). This is similar to the national average unemployment rate, which is 3.5%.
In terms of job growth, Louisiana is ranked 30th with 191,900 new jobs being created in the state. This is good news for those still seeking gainful employment.
Louisiana is a “right to work” state, which means that a newly hired employee can join a union and pay dues, but that they are not required to do so. The downside of this is that there may be less job security and lower wages.
The state is also an “employment-at-will” state. This means that an employer may terminate an employee for any or no reason. The only exception is if the reason is either illegal or proof of discrimination. Like other employment-at-will states, Louisiana offers reduced job security as a result.
How to apply for unemployment benefits in Louisiana
Apply for unemployment benefits in Louisiana in one of the following two ways:
- Go to the Louisiana Workforce Commission website and apply online.
- Call 1(866) 783-5567 and complete the application on the phone. Business hours are Monday through Friday from 8:00 am to 5:00 pm CT.
Before applying for benefits, you’ll need to have the following information:
- Your full name
- Names and addresses of any previous employers (from the past 18 months)
- Other employment information (ex. income, state and end date, etc.)
- Social Security Number
- Some form of identification (ex. driver’s license or U.S. passport)
- Valid email address and phone number
- Alien registration number if you’re not a U.S. citizen
- Union hall name and number (if applicable)
The state has a dedicated FAQ page describing the application process, who’s eligible, and the maximum amount of benefits individuals can get.
If approved, you’ll need to make weekly requests to continue receiving unemployment benefits. The deadline to file for benefits is Friday at 4:00 pm CT. It can take three to four business days to receive your first deposit.
Banking and taxes in Louisiana
Louisiana has graduated individual income tax. For single filers, or for head of household, the tax rate is as follows:
- 1.85% for the first $12,500
- 3.50% for the next $37,500
- 4.25% for anything above $50,000
For married or joint filers, or for those who qualify as a surviving spouse, the tiers are:
- 1.85% for the first $25,000
- 3.50% for the next $75,000
- 4.25% for anything above $100,000
Additionally, Louisiana has a 4.45% sales tax rate.
When it comes to banking, 8.1% of Louisiana’s population were considered unbanked in 2021. This means that an estimated 374,547 people out of 4,624,047 people don’t have checking or savings account or use a traditional bank or financial institution.
The problem with this is that many unbanked individuals regularly turn to expensive or predatory services like payday lenders to get what they need.
Louisiana housing market
In Louisiana, the average home value is around $217,587. This is a 10.5% increase from last year. In comparison, the typical home value in the United States is $357,589. In other words, Louisiana homes are about $140,000 below the national average.
Around 65.9% of Louisiana residents are homeowners. The median monthly mortgage payment is $1,279, based on Business Insider. The average rent depends on the city. For example, a 940-square-foot apartment in Baton Rouge costs $1,169, according to RentCafe. In New Orleans, a similar apartment costs around $1,336.
Retirement in Louisiana
The average Louisiana resident has around $386,908 set aside for retirement. However, it’s recommended that Louisianians have closer to $918,844 saved up to retire comfortably.
Average Louisiana insurance premiums
On average, Louisiana residents pay about $2,009 a year for homeowners insurance, or around $167 a month, for a standard $250,000 home. The premium for larger homes or those located in zones at high risk of environmental damage (ex. storms or flooding) may cost more.
The average car insurance premium ranges from $80 to $227 a month, depending on the coverage type. Throughout the country, the standard monthly premium is around $147, making auto insurance in Louisiana much higher.
Payday lending status in Louisiana: Legal
Payday loans are legal in Louisiana. Unfortunately, they’re so prevalent that two Louisiana cities, Baton Rouge and New Orleans, landed in the fourth and fifth spots in a ranking of cities with the biggest payday lending problems. However, payday lenders do have to follow specific regulations, such as:
- 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
Statute of limitations on debt in Louisiana
The statute of limitations on debt ranges from three to 10 years, depending on the type of debt:
- Medical debt: 3 years
- Credit card: 3 years
- Auto loan debt: 3 Years
There is no limit on state tax debt.
State hardship programs
Louisiana offers multiple state hardship programs to qualifying individuals. These include:
- State of Louisiana Governor’s Office of Homeland Security and Emergency Preparedness: Here, you can find different types of assistance for situations outside of your control, such as emergency situations like weather or presidentially declared emergencies.
- Louisiana Homeowners Assistance Fund: A federally funded program for homeowners, this program is designed to help those impacted by COVID-19. It can potentially provide up to $50,000 in financial aid to those who qualify.
- LHC — Louisiana Housing Corporation: The LHC provides information related to the Low-Income Home Energy Assistance Program (LIHEAP), which can help people through energy payment assistance.
- Single Family Housing Repair and Grants Program: Referred to as Section 504 Home Repair, this program provides loans to low-income homeowners needing to improve or repair their primary residence.
- LaCHIP: The Louisiana Children’s Health Insurance Program was implemented to help children under the age of 19 pay for healthcare. It comes with certain monthly income limits, but can result in free healthcare.
- SNAP: The Supplemental Nutrition Assistance Program is a nationwide program offering monthly benefits to help cover food costs for low-income families.
- LaCAP: The Louisiana Combined Application Project is a program for residents over the age of 59 who also receive Supplemental Security Income. The program can help with food costs.
- WIC: The Women, Infants, and Children program helps provide nutrition education and assistance to pregnant women and those with dependents in the household.
- Medicaid For Women: This resource connects women to specific economic assistance programs based on their situation and needs.
- LORI: The Louisiana Organization for Refugees and Immigrants helps immigrants integrate into the United States more easily. It can also help people on their journey to receiving citizenship.
Help for Veterans
As of 2020, 279,287 veterans lived in Louisiana. If you’re one of them, or if you’re a surviving spouse in need of financial assistance, the Louisiana Department of Veteran Affairs may be able to help.
Facilities in Louisiana
Here are some of the major VA facilities in the state of Louisiana:
- 2400 Canal Street, New Orleans, LA 70119-6535
- (800) 935-8387
Overton Brooks Veterans’ Administration Medical Center
- 510 East Stoner Avenue, Shreveport, LA 71101-4243
- (318) 221-8411
- 2495 Shreveport Highway Pineville, LA 71360-4044
- (318) 473-0010
- 7850 Anselmo Lane Suite B Baton Rouge, LA 70810
- (225) 761-3140
- 1250 Poydras St. 4th Floor, Suite 400 New Orleans, LA 70113
- (504) 507-4977
- 1255 Shreveport Barksdale Highway Shreveport, LA 71105
- (318) 861-1776
- Southeast Louisiana Veterans Health Care System 2400 Canal Street, 2H New Orleans LA, 70119
- (800) 698-2411
Employment resources for Veterans
If you’re a veteran looking for a specific resource to help with employment, here are your best options:
- CareerOneStop offers career resources, a job search portal, and job advice for veterans.
- MilitaryHire.com has helped 1.4 million veterans, military spouses, and family members find jobs that use their military-related skills.
- VeteranRecruiting.com has virtual career fairs designed to help veterans and military families find employment
- Helmets to Hardhats connects active military personnel and veterans alike transition into the construction industry as civilians.
- Hiring Our Heroes works with veterans and other military personnel to get them involved in networking events, provide them with hiring opportunities, and more.
- My Next Move helps veterans find civilian work that uses their military skills.
- Warriors to Work connects veterans and potential employers, while helping veterans update their resumes.
The bottom line
Debt relief for Louisiana residents exists in many forms, from debt settlement to nonprofit credit counseling agencies. Besides that, there are also many federal and state-specific economic hardship programs designed to get you back on your feet. In the meantime, if you’re being harassed by debt collectors, knowing your rights as a consumer can help.
If you owe medical debt, credit card debt, or auto loan debt, a debt collector can try to collect on it for up to three years. However, if you owe state tax debt, there is no expiration date.
On most debts, the statute of limitations begins on either the most recent payment date or when you first miss a payment.
Louisiana is a community property state, meaning each spouse is responsible for half of all debts that were incurred during the marriage. Debts from before the marriage may be the responsibility of the one who incurred them.