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What are Chapter 13 Discharge, Chapter 13 Hardship Discharge?


In Texas, if all of the payments under Chapter 13 of the bankruptcy code are made, a debtor may discharge his or her debts. A debtor may also be allowed a discharge if he or she can certify that all family support payments have been taken care of, including court ordered child support payments, as well as spousal maintenance or support.

Furthermore, a debtor must not have received or have been allowed another discharge within two years prior in order to be allowed a Chapter 13 discharge. Also, the debtor needs to have successfully completed a course in management of finance before he or she can obtain a discharge under Chapter 13.

A Chapter 13 discharge allows a debtor to free themselves from almost all debts, with only a few exceptions. After a debtor has been granted a Chapter 13 discharge, creditors may not initiate a suit against the debtor for the collection of the obligations, and ongoing suits, if any, may be discontinued.

A Chapter 13 discharge releases a debtor from all debts except alimony or spousal support, child support payments, certain taxes, debts arising out of personal injury liabilities, debts ensuing from government sanctioned loans, and criminal fines among others. These debts are called non-dischargeable debts.

A hardship discharge under Chapter 13 of the bankruptcy code is available under certain conditions. If the debtor has not been able to make payments to repay his or her debts due to reasons beyond the control of the debtor, he or she may be granted a hardship discharge. In instances where a debtor has paid the creditors at least as much money as would have been paid if it was a Chapter 7 bankruptcy case, a hardship discharge may be allowed. Also, if a modification to the current plan is unworkable, a hardship discharge may be granted.

Source: USCourts.gov, "Individual Debt Adjustment," Dec.19, 2014

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