Bankruptcy and the hardship discharge

In Chapter 13 bankruptcy there is something known as a “hardship discharge.” Basically, if your circumstances merit it, you can be given a discharge in your Chapter 13 case without actually completing your Chapter 13 plan.

However, it is very difficult to obtain one of these “hardship discharges.” The requirements are as follows:
1. Your Chapter 13 plan has been confirmed; and
2. You can otherwise receive a Chapter 13 discharge; and
3. You cannot currently make your Chapter 13 payments for reasons that are out of your control (mainly illness); and
4. Your Chapter 13 creditors have received what they would have in a Chapter 7; and
5. There is nothing you can do to help make the Chapter 13 payments.

These requirements are questions of fact, however, and require a judge to find them satisfied based on his assessment of your current and future financial situation.