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Debtor with medical issue gets hardship discharge

Kentucky residents may be interested to hear about debtors who were awarded a hardship discharge in a Chapter 13 bankruptcy case. The case involved an attorney who had a stroke during the case and his wife who also had medical issues. A judge from the U.S. Bankruptcy Court for the Southern District of West Virginia ruled on Dec. 5 that facts in the case established that the debtors met all three requirements for the discharge.

To receive a hardship discharge, debtors would have to show that the failure to make payments was beyond their control. Furthermore, it must be shown that unsecured creditors would not have received less than they would have in a Chapter 7 case. Finally, it must be shown that modifying a repayment plan would not be practical. The attorney and his wife originally filed for Chapter 13 protection in 2005 with their plan being confirmed in 2011.

Under the terms of their plan, they were to pay $1,897 per month for 60 months. They had paid $123,790 and owed another $11,383 to creditors according to the court. Although the trustee in the case argued that the man's had medical issues before filing for bankruptcy, the court found that the stroke caused an unexpected inability to work or lead a normal life.

Those who are looking for a fresh financial start may wish to file for Chapter 13 bankruptcy. It may make it easier to reorganize and repay existing secured and unsecured debts. An attorney may be able to work with a debtor to explain the benefits of filing. These benefits may include an automatic stay from creditor collection efforts such as a foreclosure or a lawsuit. Filing for bankruptcy may also put a halt to wage garnishment while the case is ongoing.

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