When a Pittsburgh resident is struggling financially and is considering Chapter 13 bankruptcy, it is important to get good information and professional advice. There are benefits to Chapter 13 that make it preferable to many debtors when assessed in comparison to Chapter 7. For example, a debtor who uses Chapter 13 can retain certain properties without fear of repossession or liquidation. There will be three or five-year plan to repay the debt by sending payments to a trustee who will in turn send them to creditors. These are the basics. Since situations often differ, there are other factors that should be understood.
Some debtors are confronted with challenges that prevent the completion of the plan. In these cases, it is possible to get a hardship discharge. Once the Chapter 13 bankruptcy plan has been confirmed, there are times when a situation will arise that stops the debtor from being able to complete the plan. If this occurs, the court might grant a hardship discharge at the debtor's request.
There are generally three circumstances under which a hardship discharge can be given. First, the debtor will have failed to complete the plan because of issues that were not in his or her control and for which they were not at fault. Second, the creditors must have gotten at least the amount they would have if there was a Chapter 7 liquidation instead of a Chapter 13. Third, there is no possibility of modifying the plan. Examples of when there can be a hardship discharge are if there is an illness or injury that stops the debtor from being able to work or they cannot fund a modified plan.
A Chapter 13 hardship discharge is available in rare cases, but it is possible to get a one if the circumstances meet the criteria. With any bankruptcy filing, having legal advice is one of the key factors to the successful conclusion of the process. A law firm that has helped many people out of debt through Chapter 13 bankruptcy should be the first call that is made to discuss the preferable solution.