Hardship Discharge

[mylife]

Good morning,

Has anyone had a hardship discharge or know much about it? Our attorney suggested it to us.

Thank you

[justbroke]

Hardship discharges in a Chapter 13 are rare, but they are granted. Generally, you would need to show that you can not afford to continue your plan due to illness or change of circumstances such as divorce, death of spouse, or other life changing events that are not your fault. The real question is whether a conversion to a Chapter 7 is a better path to discharge. I can't answer that question.

[mylife]

I apologize for the delayed response but thank you justbroke. Our issue is that our income has decreased while our expenses increased. Our payment has changed about five times and we're 2.5 years in to a 5 year plan. We're waiting on a modification now of the plan to reduce the payment then the attorney said in a few months he'll apply for a hardship discharge. I refuse to believe it but my husband said the attorneys and trustees are in cahoots.

[justbroke]

The way that your attorney is handling this, is the standard procedure in almost every District. That is, when income is affected, the Plan is first modified or a forbearance is given. After that fails, then either a conversion to Chapter 7 or a hardship discharge can be pursued.

[mylife]

Thank you justbroke.