Appealing a Denied Chapter 13 Bankruptcy Hardship Discharge

Filing for Chapter 13 bankruptcy in Federal bankruptcy court allows you to get some relief from your debts and harassment by creditors, while paying back your debts over a period of time between three and five years. Unlike a Chapter 7 bankruptcy, chapter 13 does not require you to liquidate your assets to repay your creditors, and as such is preferable because it allows you to keep your home and other important assets. If you find that you are having problems paying your court-ordered Chapter 13 agreement payments, you may file for a hardship discharge. Hardship discharges are granted under three cases. If your hardship discharge has been denied, appealing a denied Chapter 13 bankruptcy hardship discharge is your best course of action to try to salvage your financial situation. When appealing a denied chapter 13 bankruptcy discharge, you must satisfy several requirements before your appeal will be granted.

Appealing a Denied Chapter 13 Bankruptcy Hardship Discharge

To be granted a chapter 13 bankruptcy hardship discharge, the following conditions must be met:

The failure to complete your chapter 13 payments must be due to circumstances which are beyond your control
The value of the unsecured assets which you have distributed so far must be greater than or equal to the amount that your creditors could expect to receive if they were to liquidate your property and take the assets in a Chapter 7 filing
Modification of the plan to allow for longer payment intervals or a lower payment must not be practical or possible under current bankruptcy law.

If you have been denied a chapter 13 bankruptcy hardship discharge, it is likely that the denial occurred because you did not meet one or more of those conditions.

In order to successfully appeal a hardship discharge that has been denied, you will need to file a timely motion of appeal with the bankruptcy court that is handling your Chapter 13 bankruptcy. In addition, you will have to notify your trustee that you are requesting a hardship discharge, and explain any reasons why you feel your hardship discharge satisfies the above criteria and should be allowed. Your trustee and your attorney will go over the information you have provided and attempt to prove to the judge that your hardship discharge claim is legitimate and should be allowed.

Any supporting information you can provide, such as evidence of a disease or disability that has led to your job loss or has cost you excessive amounts of money in medical bills, will help to prove that the circumstances of your loss of income are out of your control. In addition, you will want to provide valuations of your assets in order to prove that you have already paid enough to your creditors to satisfy the second requirement. Since most Chapter 13 filings are already distributed over the maximum 5-year payment plan, you will not likely be able to modify the plan, so you will have to make your appeal on the strength of the first two points.

Getting Help

An experienced bankruptcy attorney can help guide you through the process of appealing a denied chapter 13 bankruptcy hardship denial and can help you maximize your chances of appealing successfully and have your debts discharged.

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