A Wisconsin Chapter 13 Hardship Discharge is a form of bankruptcy relief that allows debtors to receive a discharge of their unsecured debts if they can prove to the court that repaying those debts would result in an undue hardship. In order to be eligible for such a discharge, a debtor must have filed a Chapter 13 bankruptcy petition and must have made all required payments for at least three years. There are two types of Wisconsin Chapter 13 Hardship Discharges available. The first is a “No Asset” Hardship Discharge, which applies when the debtor has no non-exempt assets and no money to distribute to creditors. Under this type of discharge, unsecured creditors will receive nothing. The second is a “Partial Asset” Hardship Discharge, which is available when the debtor has some assets that are not exempt from the bankruptcy estate. Under this type of discharge, non-exempt assets will be liquidated and distributed to creditors in accordance with the terms of the Chapter 13 bankruptcy plan.
Wisconsin Chapter 13 Hardship Discharge
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FAQ
It's designed so you'll pay the amount you can afford. Therefore, the court will only let you complete your Chapter 13 bankruptcy early under two conditions: You can pay all of your claims, including unsecured debts, in full, or you can prove a financial hardship.
Some examples of dischargeable debts in Chapter 13 include credit card debt, medical bills, utility bills, and personal loans. Unsecured Debts ? Unsecured debts are not linked to any collateral, such as utility bills and medical bills.
To obtain the hardship discharge the debtor must first show an inability to continue making the scheduled Chapter 13 plan payments. In other words, something has happened to you financially that reduced your income or ability to pay your creditors. The change in finances must be beyond the debtor's control.
When you get an early discharge from a chapter 13 bankruptcy plan, it either means you couldn't make the required payments due to an unexpected hardship or you were able to pay off your debts in full. Either way, the discharge allows you to be freed of your debts.
Terminology can get confusing because "hardship" and "dependency" discharges are often both loosely labeled "hardship." Specifically, a hardship discharge is when the financial needs of family member(s) require more than the military member can provide while remaining in the military.
When the plan completes at month 36, any remaining balance due on general unsecured claims is discharged unless a particular debt happens to fit in the nondischargeable category. A plan will continue past 36 months (up to a max of 60 months) until the debtor has paid the ?must pay? debts.
About 45 days after you've received your discharge, you will receive a document called a Final Decree. It's the document that officially closes your case. Once this document is received, you are no longer in bankruptcy.
Since a chapter 12 or chapter 13 plan may provide for payments to be made over three to five years, the discharge typically occurs about four years after the date of filing.