How to Request a Hardship Discharge From Bankruptcy Court

If you declare bankruptcy under Chapter 13, you will usually be expected to make payments over the course of 3 to 5 years in order to discharge all of your debts. However, you may be unable to complete your payment plan entirely and may need to request a hardship discharge from the court. Be aware, however, that the entire burden of proving your eligibility for a hardship discharge lies with you, and that your creditors are entitled to challenge it. Here are tips on requesting a hardship discharge.

Things You'll Need

• Lawyer
• Motion to file with the court
• Proof of payment
• Proof of inability to meet modified payment plan

Instructions

1. Consult your lawyer to determine if you can qualify for a hardship discharge. Hardship discharges are rarely granted. Judges prefer to modify payment plans rather than discharge debts altogether.

2. Request a hardship discharge from the judge overseeing your bankruptcy case by filing a motion with the court. The court will hear your case and decide whether to grant your request.

3. Prove that your creditors have received at least as much as they would have if you had liquidated your assets and divided the money among them during your original bankruptcy case.

4. Establish that there is no possibility to modify your payment plan. You will essentially need to show that you cannot pay even a reduced amount. Injury or illness severe enough to prevent employment is typical proof.

5. Demonstrate that your failure to complete your payment plan is due to no fault of your own. To qualify for a hardship discharge, your inability to make payments must be caused by circumstances beyond your control.

Tips & Warnings

• Contact your local bankruptcy court for the appropriate forms. There is no federal form to request a hardship discharge.

• You can specifically request a hardship discharge for student loans if you can prove that you will not be able to maintain a minimal standard of income to support you and your dependents if you repay your student loans.

• If your request is denied, you can dismiss your case and refile.

• There are a number of debt types, such as child support, that cannot be discharged, even if the court grants you a hardship discharge.

• You may be ineligible for a discharge if you failed to complete a course on personal financial management.

• A hardship discharge can be revoked if it was obtained through fraud.

• You may not be able to qualify for a discharge if you have received one previously.

• It is extremely difficult to obtain a hardship discharge without the aid of an attorney.