This bill amends and reenacts several provisions of Louisiana's bankruptcy law, specifically R.S. 9:5175, to clarify the procedures for obtaining bankruptcy orders and discharges. Key changes include the introduction of new language that allows a judgment debtor to bring an action to declare a judicial mortgage extinguished following a bankruptcy discharge, provided that the judgment was scheduled or disclosed in the bankruptcy proceedings. The bill also specifies that if a judgment creditor can prove they have equity in property due to the judicial mortgage, the cancellation order will exclude that property. Additionally, the bill establishes a new section, R.S. 9:5175.1, which outlines the process for a Louisiana licensed attorney to specify which liens, judgments, mortgages, or privileges are to be partially cancelled when a bankruptcy court order does not provide that detail.

The bill also modifies the requirements for affidavits submitted in support of partial cancellations of judgments, including the need for a statement of indemnification for the clerk or recorder relying on the affidavit. Other procedural details are clarified, such as the information that must be included in the affidavit, including the legal description of the property and notice to holders of the liens or judgments being cancelled. The effective date of the bill is contingent upon the governor's signature or the expiration of the time for bills to become law without signature.

Statutes affected:
HB580 Original: 9:5175(B)
HB580 Engrossed: 9:5175(B)
HB580 Reengrossed: 9:5175(A)
HB580 Enrolled: 9:5175(A)
HB580 Act : 9:5175(A)