A Chapter 13 bankruptcy is designed to create a three or five year program for repayment of debts for specific creditors in accordance with rules agreed upon by all parties and overseen by a court appointed trustee. If a debtor is unable to make good on his or her responsibilities under the Chapter 13 reorganization provisions, he or she may file for what’s known as a Hardship Discharge in an attempt to get out from under the thumb of creditors. State courts and even individual judges may disagree on what precisely constitutes hardship requisite to qualify for a “hardship discharge.” However, in general, if the debtor has suffered a massive personal injury or has been unable to work for reasons well beyond his or her capacity to control, a hardship discharge may be granted.
Of course, for a debtor to qualify for this discharge, the Chapter 13 plan must not be able to be modified to a Chapter 7 bankruptcy program. Your attorney can fill you in on contextualized definitions of hardship relating to your case. Remember that even with a hardship discharge, you may still have to manage long-term credit obligations, such as student loans, palimony, and taxes to the federal, state, and local government.
