Question 1

What is Section 1328 of the Bankruptcy Code?

Accepted Answer

Section 1328 (11 U.S.C. 1328) governs the discharge in Chapter 13 bankruptcy. Section 1328(a): after completing all plan payments, the debtor receives a discharge of most debts. Section 1328(b): "hardship discharge" (the debtor can receive a discharge even without completing all payments if: the failure is due to circumstances beyond the debtor’s control, unsecured creditors have received at least what they would have received in Chapter 7, and modification of the plan is not practicable). The Chapter 13 discharge is broader than Chapter 7: it discharges some debts that Chapter 7 does not.

Question 2

What debts are not dischargeable under Section 1328?

Accepted Answer

Non-dischargeable: domestic support obligations (alimony and child support), certain tax debts (recent income taxes that meet specific criteria), student loans (unless undue hardship is proved), debts for death or personal injury caused by DUI, criminal restitution, and debts not listed in the plan or schedules. Post-BAPCPA (2005): the Chapter 13 discharge was narrowed to exclude many of the same debts that are non-dischargeable in Chapter 7 (Section 523(a) debts). However: Chapter 13 still discharges some debts that Chapter 7 does not: certain property settlement debts in divorce and some government fines.

Question 3

What is the hardship discharge under Section 1328(b)?

Accepted Answer

Hardship discharge: allows a discharge even if the debtor did not complete all plan payments. Requirements: the failure was due to circumstances beyond the debtor’s control (job loss, disability, medical emergency), unsecured creditors received at least the Chapter 7 liquidation value, and modifying the plan is not practicable (the debtor’s financial situation makes it impossible to complete any modified plan). The hardship discharge: is narrower than the regular discharge (more debts remain non-dischargeable), and is discretionary (the court decides whether the requirements are met).

Section 1328

Section 1328 (Chapter 13 Discharge)

Full Discharge

Hardship Discharge

Non-Dischargeable

Related Terms

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