Requirements for bankruptcy hardship discharge

A bankruptcy can be a difficult and stressful financial situation for any Florida resident. While a Chapter 13 bankruptcy creates a plan for the repayment of debt using future income, sometimes unexpected events occur that make the plan impossible to complete. In this case, the debtor can file for a discharge of the debt under a claim of hardship. The law has a few requirements that must be made in order for that to happen.

A former lawyer came face to face with this situation after he had a stroke and was unable to work. The lawyer had filed a Chapter 13 bankruptcy with a manageable payment plan. After his stroke affected his ability to work, he fit the requirements for the hardship claim.

One of the most important factors in the hardship claim is that the change in circumstances was not foreseeable. A serious injury or illness often satisfies this requirement. It must also be proven that if the bankruptcy were filed as a Chapter 7 instead of 13, the creditors would not gain any more money. Finally, the debtor must prove that their income is unable to sustain both their general living expenses or medical expenses and a planned repayment of debts.

Bankruptcy proceedings can be complicated. A debtor who is currently in a Chapter 13 bankruptcy and has a change in financial circumstances that affects their ability to repay may wish to consult a bankruptcy lawyer for help. The lawyer may be able to provide more insight and options for the debtor to either renegotiate the repayment or file for a hardship to have the remaining debt discharged. Many debtors who cannot follow through with a Chapter 13 must file a Chapter 7 instead and liquidate assets. The lawyer may able to provide insight into what this means for a particular case.