What is a Chapter 13 Bankruptcy Hardship Discharge?

Unlike chapter 7 bankruptcy, chapter 13 bankruptcy doesn't simply discharge or wipe your debts away when you leave the bankruptcy court room. Instead, during the process of a chapter 13, you create a plan to repay a portion of you debts. Once you create this plan, it must be signed off on by both the creditors to whom you owe the money and the court who is handling your bankruptcy. The plan is generally scheduled to last for anywhere from three years to five years, and during that time, you'll need to make your payments every month to the trustee. Those payments that are required are based on your income.

So, what happens if you are in the process of a chapter 13 bankruptcy repayment plan and something happens and you can't make your payments any more? That is where a chapter 13 hardship discharge comes in. Essentially, you'll need to show the bankruptcy court that it has become too much of a hardship for you to be able to keep paying your monthly obligations under the chapter 13 repayment plan. Generally, you will also have to show that your creditors have already received as much as they would have had you filed a chapter 7, in order for a chapter 13 hardship discharge to be granted.

To get help seeking a chapter 13 bankruptcy hardship discharge, you should strongly consider speaking with a lawyer. Your attorney can let you know if you might be eligible for a discharge based on your financial circumstances and can also assist you in filing the required paperwork with the court.