Debt relief in Louisiana: Facts, Programs, and Solutions

If you live in Louisiana and you're behind on bills, you’re not alone. Many residents are struggling with credit card debt, and everyday costs in cities like New Orleans and Baton Rouge make it even harder to stay afloat. It’s getting harder to keep up—and easier to fall behind.

Debt relief solutions can help you regain control. Depending on your situation, you may be able to reduce what you owe, lower your monthly payments, or find a structured way to pay off your debt over time.

What Is Debt Relief?

Debt relief has more than one answer. It’s any strategy that relieves the burden of debt.  

Debt settlement is one possible debt relief strategy. Settling debt means working out an agreement with your creditor to accept less than the full amount you owe and forgive the rest. Your creditor gets paid something, so the debt isn't a total loss. And you get some debt relief.  

Your situation can influence the type of debt relief that's best for your needs. In addition to debt settlement, debt relief options include:

• Debt management plans (DMP)

• ​​Debt consolidation 

• Credit counseling

• Bankruptcy

Average credit card debt in Louisiana - debt relief seekers 

Credit card debt in Louisiana impacts many across all age groups. We looked at a sample of data from Freedom Debt Relief of people seeking debt relief during February 2025. Here are the key statistics:

Copyright© $2025. Freedom Debt Relief, LLC. www.freedomdebtrelief.com

This snapshot shows that the average credit card debt for Louisiana residents seeking debt relief rose slightly month-over-month (MoM), with the percentage of debt holders and the average debt for balance carriers experiencing a modest increase.

Copyright© $2025. Freedom Debt Relief, LLC. www.freedomdebtrelief.com

Debt Settlement: A Powerful Solution in Louisiana

It’s no surprise that life gets expensive. The cost of living in the Bayou State is 9% lower than the national average. But cities vary, with expenses in Baton Rouge and Shreveport higher than the national average. And residents of the Paris of the South (New Orleans) can expect bills to soar 22% above the national average. 

One signal that people are stretched is the amount of average credit card debt, which hit more than $8,000 in 2024. That’s a big increase from credit card debt before the pandemic in 2020. In Louisiana, the average credit card debt was $5,796 per consumer in 2023, according to data from TransUnion. 

If you’re juggling multiple payments for your debts, it’s easy to feel overwhelmed, especially if you feel like you’re making scant progress. Debt settlement is a way to clear unsecured loans like credit card balances or medical bills. Mortgages and car loans—both examples of secured debt—aren't eligible for debt settlement.

How debt negotiation works

Debt negotiation is a key part of debt settlement. Here’s how it works. 

Creditors want to get paid. But they might be willing to let you settle your debt for less than the full amount if it’s clear that you’re struggling financially. If you intended to fully repay your debts but now you can’t, an agreement might be possible. 

To negotiate with your creditor, it helps to have something to offer. If you don’t have savings set aside that you could offer, you may need to build up funds. It’s hard to save money when you’re already struggling to keep up with debt payments. So most people choose to stop making payments to their creditors and instead put money aside each month until there’s enough to make an offer.

Missing debt payments is likely to have a serious negative impact on your credit standing. Also, when your account is delinquent, your creditor could sue you. 

Once you have enough money, you can make an offer. Expect the creditor to play hardball. Negotiating can be time consuming and stressful. You’ll probably have to plead your case and explain why you can’t pay back the debt. They’ll want you to pay as close to the full amount as possible. If you’re uncomfortable or intimidated by the process, you could work with a professional debt settlement company and let them negotiate for you.

If you have several debts, it could look like this: 

• Contact each lender separately

• Negotiate with each lender to reduce the amount you owe 

• Get a written agreement from each lender outlining the terms of your negotiation 

A debt settlement company can’t guarantee that your creditors will agree to settle your debts. But a reputable, professional company should support you through the process from beginning to end, and may already have relationships with your creditors.  

Is a Debt Consolidation Loan the Right Choice?

Debt consolidation is an alternative to debt settlement. When you consolidate debt, you take out a new loan and use the money to pay off your credit cards, medical bills, or other debts. The new loan gives you just one loan payment each month. If the new loan has a lower interest rate than your current debts, you could get a lower monthly payment or save on overall interest charges. 

For Louisiana residents who have more than $10,000 in debt, debt consolidation could be a good strategy. 

Is debt consolidation a better option than debt settlement? The answer depends on your personal situation. Debt consolidation could make sense if you:

• Have good or excellent credit

• Want to simplify monthly debt payments

• Owe an amount you believe you can handle, since consolidation doesn't reduce the amount you owe. It only combines your debts 

Debt settlement may be a good choice if you: 

• Can’t afford to fully repay your debts 

• Have a financial hardship that makes it difficult to keep up with debt payments

• Owe mainly unsecured debt

If you’re interested in debt consolidation, compare personal loans for debt relief from different lenders to estimate how much you could borrow and what you'd pay in interest.

Other Debt Relief Alternatives in Louisiana 

Debt relief in Louisiana isn't limited to debt settlement or debt consolidation. Here are a few other options you might consider.

• Hardship programs. Hardship programs for debt can give you some room to breathe if you're in the middle of a financial downturn. If you lose your job, you might be able to join your credit card hardship program to get fees waived or your payment temporarily reduced. 

• Income-driven repayment plans. Income-driven repayment (IDR) is associated with student loans, specifically federal loans. If you have student debt, an IDR plan could bring your payment down to a level that fits your budget.

• Credit counseling. A credit counselor can review your debt and budget and come up with strategies for your personal situation. That might be debt consolidation, debt settlement, or a debt management plan. A DMP is a structured plan to pay off your unsecured debts over two to five years. You typically have to agree not to use credit cards while you’re on the plan. Your creditors might agree to lower your fees or interest rates, but you won’t get a discount on the amount of debt you owe.

• Bankruptcy. Filing for bankruptcy means making a formal request to a bankruptcy judge for protection from creditors. Sometimes it’s the best way to deal with debt. Chapter 7 bankruptcy can help you walk away from certain debts, but you might have to give up some of the things you own. Chapter 13 allows you to repay what you owe over three to five years without being forced to sell the things you own. Bankruptcy also shields you from collection actions, including debt lawsuits. 

Understanding the Statute of Limitations (SOL) on Debt in Louisiana

The statute of limitations refers to the length of time a creditor has to sue you for unpaid debt. If they wait longer than the time allowed, they’ll be unable to take civil action against you to get their money back. For credit card debt, the Bayou State has the shortest time frame in the nation at three years. (Some other states have a statute of limitations that’s more than 10 years.) 

In most states, that period begins on the date you miss your first payment on the debt. If you're thinking about this way to deal with your debt, you might want to talk to a lawyer. State legislatures can change the time limit on the statute of limitations.

Even if the statute of limitations expires, you'll still legally owe the debt. The only difference is that if the creditor sues you, you could ask the judge to throw out the case because it’s been too long.

Making a partial payment, and sometimes even acknowledging a debt, could restart the statute of limitations. 

Taking the Next Steps in Louisiana

Now you're ready for the next step, which is to choose a debt relief solution. 

That's where Freedom Debt Relief comes in. We've worked with over half a million Americans to offer personalized debt solutions and we're ready to help you, too. We know there's no such thing as one-size-fits-all, and our Freedom Financial Certified Debt Consultants can walk you through the options to help you choose the one that best meets your needs. Even if it’s an option we don’t provide.

To find the right solution for you, just follow these four simple steps:

1. Call Freedom Debt Relief at 800-910-0065 for a free, no-obligation debt relief evaluation with a Certified Debt Consultant.

2. Learn about available debt-relief options and get help customizing the right solution for you.

3. Commit to staying the course. No matter which Louisiana debt help you choose, keep your eye on the prize until you’ve completed it.

4. Look forward to a better financial future and the prospect of a worry-free life when you’re free of debt.