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A hardship discharge through Chapter 13 bankruptcy

The foundation of a Chapter 13 bankruptcy reorganization plan is the commitment of the debtor to the repayment of their debts. An individual who pursues Chapter 13 bankruptcy generally must have sufficient income that may be applied to the balance of their outstanding loans in order to be eligible for the process. However, from time to time a Tennessee resident who is pursuing Chapter 13 bankruptcy may experience a devastating setback that may prevent them from continuing with their repayment plan.

For example, consider a Chapter 13 debtor who is a few years into their repayment plan. They have been steadily chipping away at their outstanding debts and successfully applying their extra income to that purpose. If that person was afflicted with a serious illness or injury that prevented them from working, they could become unable to work and therefore unable to earn any income.

The loss of one's income due to unforeseen forces may provide a person with the basis to request a hardship discharge under Chapter 13 bankruptcy. If the individual cannot complete their repayment plan because of the hardship, the bankruptcy court may still grant them a discharge if the cause of their hardship was not of their own making. The creditors in the Chapter 13 matter would also had to have received as much as they would have had the debtor pursued Chapter 7 bankruptcy instead of Chapter 13.

A hardship discharge can be difficult to achieve but may be possible for individuals who find themselves in the impossible position of not being able to complete their repayment plans. More information about this option can be gathered from bankruptcy attorneys who work with individual debtors.

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

Phone: 423-624-4002
Toll Free: 800-257-7594
Fax: 423-624-0509
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