While Chapter 7 bankruptcy allows for many debts to be discharged soon after the initial filing, Chapter 13 bankruptcy requires debtors to submit a repayment plan that will allow them to make monthly payments on their debts for either three or five years before receiving a discharge. However, in some cases a bankruptcy judge will fully discharge all remaining debts in Chapter 13 bankruptcy before a repayment plan concludes if the debtor can show that he or she qualifies for a hardship discharge.
Obtaining a Hardship Discharge
The decision to file for Chapter 7 or 13 Bankruptcy depends on many factors including the assets and income of the debtor and the types of debts that the debtor is seeking to be relieved of, as some types of debts are only dischargeable in Chapter 13. However, as Chapter 13 requires the repayment of all or some debts, sometimes debtors find they are unable to keep up with payments. Courts may allow for a hardship discharge in certain cases in which a debtor is unable to keep up with payments, but bankruptcy courts are never under any obligation to grant a hardship discharge in Chapter 13 proceedings. A hardship discharge requires that a debtor demonstrate three elements to the court:
Hardship discharges are typically reserved for extreme cases, such as a long-term illness that will severely limit the debtor’s ability to earn income. If a hardship discharge is granted, then the discharge is treated like a Chapter 7 bankruptcy discharge rather than a discharge under Chapter 13. This limits a debtor from discharging several types of debt, including junior liens on a mortgaged property.
Thinking About Filing for Bankruptcy?
If you’re thinking about filing for bankruptcy, an experienced bankruptcy attorney can walk you through the process. The Law Offices of Melanie Tavare of Hayward and Oakland can assist you in reducing or eliminating debt through Chapter 7 or Chapter 13 bankruptcy. Contact the Law Offices of Melanie Tavare at 510-255-4636 or online.
The Law Offices of Melanie Tavare is a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
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