The Chapter 13 Hardship Discharge

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After confirmation of a plan, circumstances may arise that prevent the debtor from completing the plan. In such situations, the debtor may ask the court to grant a "hardship discharge." 11 U.S.C. § 1328(b).

Generally, such a discharge is available only if:

1. the debtor's failure to complete plan payments is due to circumstances beyond the debtor's control and through no fault of the debtor;
2. creditors have received at least as much as they would have received in a chapter 7 liquidation case; and
3. (3) modification of the plan is not possible.

Injury or illness that precludes employment sufficient to fund even a modified plan may serve as the basis for a hardship discharge. The hardship discharge is more limited than the discharge described above and does not apply to any debts that are nondischargeable in a chapter 7 case. 11 U.S.C. § 523.

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