Occasionally, a debtor will find herself unable to complete a Chapter 13 bankruptcy plan for reasons beyond her control, such as unemployment or disability. Under certain circumstances, such a debtor may request a “hardship discharge” which allows a debtor to complete her Chapter 13 bankruptcy before the term of the plan ends, and as long as certain conditions are met.
Section 1328(b) of the Bankruptcy Code provides:
Subject to subsection (d), at any time after the confirmation of the plan and after notice and a hearing, the court may grant a discharge to a debtor that has not completed payments under the plan only if—
(1) the debtor’s failure to complete such payments is due to circumstances for which the debtor should not justly be held accountable;(2) the value, as of the effective date of the plan, of property actually distributed under the plan on account of each allowed unsecured claim is not less than the amount that would have been paid on such claim if the estate of the debtor had been liquidated under chapter 7 of this title on such date; and(3) modification of the plan under section 1329 of this title is not practicable.