Chapter 13 Hardship Discharge

Although a chapter 13 debtor generally receives a discharge only after completing all payments required by the court-approved repayment plan, there are some limited circumstances under which the debtor may request the court to grant a "hardship discharge." After confirmation of a plan, there are limited circumstances under which the debtor may request the court to grant a hardship discharge even though the debtor has failed to complete plan payments.

Adversary Proceedings

Under Bankruptcy Rules, an adversary proceeding may be filed in a debtor's bankruptcy action for certain specific reasons. Creditors may initiate adversary proceedings to determine the validity or priority of a lien, to determine the validity of a debt, to obtain an injunction, or to subordinate a claim of another creditor.

Voidable Transfers

The trustee in bankruptcy is a lien creditor and a successor to certain creditors and purchasers. As of the commencement of a bankruptcy case, the trustee or the debtor in possession has the rights and powers of the debtor and may avoid any transfer of property of the debtor or any obligation incurred by the debtor that is voidable by certain creditors and bona fide purchasers. This is known as "avoiding" powers. Such powers may be used to undo a transfer of money or property made during a certain period of time prior to the filing of the bankruptcy petition.

Disposable Income in Chapter 12

If a trustee or a holder of an unsecured claim objects to the plan, the court cannot approve the plan unless the plan provides that all of the debtor's projected disposable income to be received during the plan will be applied to make payments under the plan. It is significant to understand that an objection by the mentioned parties must be made for the court to consider this requirement.

Chapter 7 Eligibility

A petitioner must reside in or have a domicile, a place of business, or property in the United States in order to file a Chapter 7 bankruptcy. The petitioner must not have been granted a Chapter 7 discharge within the last six years or completed a Chapter 13 plan.