What is the difference between a hardship discharge and a regular discharge in Chapter 13 Bankruptcy?

A Chapter 13 Bankruptcy is a form of bankruptcy that seeks to offer debtors an alternate way to reorganize their debts and have them discharged legally. It is mainly utilized by individuals with a regular income, as it requires repayment of debts over a specified period. In California, there are two types of bankruptcy discharges available: a regular discharge and a hardship discharge. A regular discharge is the most common type of bankruptcy discharge. This type of discharge is granted after a debtor has successfully completed their repayment plan, and all creditors have been paid. During this discharge process, the debtor must provide documentation to prove their repayment plan has been successfully completed. A hardship discharge, on the other hand, is granted when a debtor can no longer fulfill their repayment plan due to extraordinary circumstances. One example of this would be if the debtor experienced a severe illness or job loss that prevented them from meeting their repayment obligations. The court will review the debtor’s circumstances and determine whether or not they qualify for a hardship discharge. The debtor must still provide documentation to support their claim that their financial situation has made the repayment plan unmanageable. The primary difference between a regular and hardship discharge in Chapter 13 Bankruptcy is that a hardship discharge allows debtors to be relieved of their remaining debt, even if they have not met their repayment obligations. In contrast, a regular discharge requires the debtor to have met their repayment plan and all creditors have been paid.

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What is the difference between a hardship discharge and a regular discharge in Chapter 13 Bankruptcy?

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