How do I obtain a hardship discharge in Chapter 13 Bankruptcy?

In California, a hardship discharge can be obtained in Chapter 13 Bankruptcy under certain conditions. A hardship discharge is a type of bankruptcy where the court releases the debtor from their remaining debt payments. To qualify for a hardship discharge, the debtor must have made all required payments in the Chapter 13 plan. The debtor must also provide evidence of “unusual circumstances” that have arisen since the filing of the bankruptcy. These unusual circumstances must demonstrate that allowing the debtor to discharge their remaining debt payments will not substantially prejudice their creditors. The court evaluates the debtor’s income and ability to pay, the creditors’ ability to recover on their claims, and the debtor’s equity in their property to make a determination on whether to grant the hardship discharge. If the court approves the hardship discharge, it releases the debtor from any remaining payment obligations in their Chapter 13 plan. However, the debtor may still be liable for any un-dischargeable taxes and other debts that must still be paid. Additionally, the debtor will still be responsible for any future payments assigned by the court. Although a hardship discharge is allowed in California, it is not granted in every case. Generally, the court will only grant a hardship discharge when the debtor can demonstrate that they can no longer afford to make the payments listed in their Chapter 13 plan due to an unexpected change in financial circumstances.

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