Hardship Discharge - Chapter 12

Rev. 7/01/2021

 

11 U.S.C. § 1228

 

 

If payments under a plan are not completed due to circumstances for which the debtor "should not justly be held accountable" 11 U.S.C. § 1228(b)(1), and other statutory criteria have been met, a debtor may be excused from completing payments under a plan of reorganization.

 

A discharge granted under section 11 U.S.C. § 1228(c) is often referred to as a "hardship discharge".

 

 

Docket Event:

 

[Bankruptcy > Motions/Applications > Hardship Discharge]

 

Requirements:

 

KMS Cases

JAW Cases

Motion with Certificate of Service

Motion with Certificate of Service

Set for Hearing

Set for Hearing

Proposed Order

Proposed Order

 

No objections:

 - prepare order granting motion.

 - after entering order granting motion - issue hardship discharge.

 

 

Important

 

When a debtor has six or more aliases:

 

  1. Consult with a Operations Manager to create a discharge order to include all the aliases;

  2. Docket the discharge order using the generic order event. [Bankruptcy> Orders/Opinions> Other Orders> Order (Generic - Does not relate to motion)]; and

  3. Enter the discharge date and disposition date and code through [Utilities > Edit Data > Edit Case Data].

 

When debtor has less than six aliases use the docket event:

 

[Bankruptcy > Orders/Opinions > Other Orders > Discharging Debtor(s) 12 before plan completion]

 

Disposition method: Hardship Discharge

 

Discharge Forms:
 

  • debtor or both debtors in joint case Form - 3180FH - Ch 12 Hardship Discharge

  • debtor 1 in joint case: Form - 3180FHJ1 - Ch 12 Hardship Disch - Db 1

  • debtor 2 in joint case: Form - 3180FHJ2 - Ch 12 Hardship Disch - Db 2

 

After the trustee files the Chapter 12 final report and account and objection period expires, proceed to close the case.   See Closing Chapter 12