How to Get a Chapter 13 Bankruptcy Hardship Discharge

Are you considering applying for Chapter 13 Bankruptcy and would you like to learn more about the process and about how to get a Chapter 13 bankruptcy hardship discharge? Knowing your rights and understanding how to get a Chapter 13 bankruptcy hardship discharge is important to getting back on your feet financially.

What is Chapter 13?

Chapter 13 Bankruptcy is part of Bankruptcy Code of the United States. Chapter 13 specifically is a procedure that helps individuals reorganize their financial situation. This process is supervised by the bankruptcy court. Unlike Chapter 7, Chapter 13 does not offer complete and immediate relief of all of your debts – in fact, Chapter 13 makes the individual more responsible for payments, which places individuals in a tough situation. What if payments cannot be made on time?

What is A Chapter 13 Bankruptcy Hardship Discharge?

A Chapter 13 bankruptcy hardship discharge is granted by a bankruptcy court when you have not completed plan payments and when you are unable to do so. However, you must be able to prove that circumstances beyond your control are the reason that you cannot make your payments. You must also be able to prove that your failure to make your payments is absolutely of no fault of your own. For example, proving you have become injured or disabled or unable to work would be viable reasons for a Chapter 13 bankruptcy hardship discharge.

How to Get a Chapter 13 Bankruptcy Hardship Discharge

To get a Chapter 13 bankruptcy hardship discharge, you must petition the court. The court will determine whether your creditors have received as much money as they would have received if you had gone through a Chapter 7 bankruptcy liquidation case. The court will also determine whether or not they can modify your payment plan. If it is not possible for you to pay- such as if illness or injury makes it impossible to get employment and fund a modified bankruptcy plan- the hardship discharge may apply to you. Again, the problem should not be your fault; it should be a circumstance that is out of your control causing your problem that prevents you from making payments.

What if the Problem is Temporary?

If you are having temporary problems making your payments but those problems are not perfect, Chapter 13 Bankruptcy Hardship Discharge may not be right for you and your needs. If you only anticipate not being able to make payments for a few months, the most appropriate way to deal with payment issues is to work directly with Trustees to alter the payment plan temporarily. If you present a good case, your Trustee will most likely work with you, but otherwise, the Trustee will convert your Chapter 13 case to a Chapter 7 case. In the worst case scenario, your Trustee will dismiss your case entirely, and you will lose all your bankruptcy protection.

Getting Help

Before applying for a Chapter 13 bankruptcy hardship discharge, you should speak with an experienced bankruptcy attorney. Your bankruptcy attorney can guide you through the process of how to get a Chapter 13 bankruptcy hardship discharge so you can maximize your chances of having your debts discharged by the court.

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