What Is a Chapter 13 Hardship Discharge?

calculator with bills

Originally, you may have filed for bankruptcy because you underwent a tribulation that left you with a great financial burden. So it is unfortunate if you continue to experience tribulations that make it difficult to complete your bankruptcy proceedings. This is when a hardship discharge may become necessary. Continue reading to learn what a Chapter 13 hardship discharge is and how an experienced Rockland County Chapter 13 bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq. can help you take advantage of this.

What is considered a Chapter 13 hardship discharge?

Say, for instance, that you temporarily lose your job amid your bankruptcy proceedings. Or, say that you suddenly received a diagnosis of a serious medical condition. With this, you may find it difficult to explain to the New York bankruptcy court that you are suddenly unable to keep up with your three- to five-year repayment plan, as you must have been earning enough money to qualify for a Chapter 13 bankruptcy in the first place. However, in unexpected personal events such as these, the court may allow you to be relieved of your debt earlier than anticipated. This is what is known as a hardship discharge.

That said, when you petition for a Chapter 13 hardship discharge, you may have to prove the following instances as true:

  • You are struggling to make your planned payments on time because of circumstances beyond your control (i.e., you should not justly be held accountable).
  • You are under the belief that your unsecured creditors have received an adequate amount of repayment thus far (i.e., what they would have received if you filed for a Chapter 7 bankruptcy).
  • You are under the belief that a modification to your repayment plan would not be practical (i.e., you do not have enough money for a modified plan, either).

What else should I know about a Chapter 13 bankruptcy?

Firstly, you must understand that, even if you are granted a hardship discharge, there are still certain debts that will not go away. For example, you may still be obligated to pay back your missed child support payments and your recent taxes. And if you kept your home amid your bankruptcy, you may still be responsible for this secured debt.

On the other hand, there is the possibility that the court may not grant you a hardship discharge. In a case like this, it may be in your best interest to consider switching to a Chapter 7 bankruptcy. This is because you may no longer be tied to a repayment plan, and instead your Chapter 7 trustee will work on your behalf in selling your nonexempt assets to pay off your creditors.

The first step you must take in your bankruptcy filing is to make a phone call. Without further ado, pick up the phone and contact a skilled Rockland County bankruptcy attorney from The Law Offices of Allen A. Kolber, Esq. today.