When am I eligible for a Chapter 13 Bankruptcy Hardship Discharge?

If you filed for a Chapter 13 bankruptcy to recover from your financial woes but you are having difficulties in making repayments according to the terms set by the court-appointed repayment plan, you have the option to go for a Chapter 13 hardship discharge for some of your debts. Requesting for a hardship discharge is allowed if you can no longer afford to make payments as you initially promised due to reasons that are beyond your control. You may also qualify for this discharge if the creditor you owe debt from would receive what he/she would have received if you filed for a Chapter 7 bankruptcy. It is important to know however, that even if you were allowed to take on a hardship discharge, some types of debts will still not be discharged. These include but not limited to retirement plan loans, divorce debts, separation debts, homeowner’s association fees, bankruptcy case fees, and many others. Another circumstance that will qualify you for hardship discharge is if you have already done everything possible to meet the payment obligations including modifying the initial payment plan. All these circumstances should be met for the hardship discharged to be allowed. This is not permitted if you have already received this discharge two years after you filed for a Chapter 13 bankruptcy and four years after a Chapter 7 bankruptcy filing.

On top of it all, you should also complete a pre-approve course in financial management so that you will be able to handle your finances more effectively in the future.