The Three Elements of 1328(b)
Section 1328(b) allows the court to grant a discharge even though the debtor has not completed all plan payments, but only if all three of the following requirements are met:
Element 1: Circumstances Beyond the Debtor's Control
The debtor's failure to complete payments must be due to circumstances for which the debtor should not justly be held accountable. The statute uses the phrase "for which the debtor should not justly be held accountable." This requires showing:
- An event or condition that was not within the debtor's control
- The event or condition prevents the debtor from making further plan payments
- The debtor did not cause or contribute to the situation through voluntary acts
Common qualifying circumstances include serious illness, permanent disability, job loss due to plant closure or layoff, death of a spouse who contributed to household income, and natural disasters.
Element 2: Best Interest of Creditors Test
Unsecured creditors must have received at least as much as they would have received in a Chapter 7 liquidation. This is the same "best interest" test applied at plan confirmation under Section 1325(a)(4). If your plan has already paid more to unsecured creditors than they would have received in Chapter 7, this element is satisfied. Learn more →
Element 3: Modification Not Practicable
Modification of the plan must not be practicable. The court will not grant a hardship discharge if the plan could simply be modified to accommodate the changed circumstances. You must show that no reasonable modification exists. Learn more →
Important Limitation: No Superdischarge
A hardship discharge under Section 1328(b) is narrower than a full Chapter 13 discharge under Section 1328(a). The hardship discharge only covers debts that would be dischargeable in a Chapter 7 case. This means:
- Debts for fraud, willful injury, or other Section 523(a) exceptions are NOT discharged
- The "superdischarge" benefits unique to Chapter 13 completion do not apply
- The hardship discharge is functionally equivalent in scope to a Chapter 7 discharge
Why this matters: If you were relying on the Chapter 13 superdischarge to eliminate debts that would not be dischargeable in Chapter 7 (like certain property settlement obligations or debts incurred through fraud where no timely objection was filed), a hardship discharge will not help with those specific debts.
Check Your Discharge Eligibility
Stay updated on new datasets and research findings
No spam. No marketing. Just data.
Related Resources
section1328.org -- Complete Section 1328 discharge analysis
Best Interest Test -- How the liquidation analysis works
Modification First -- Why courts require you to try modification first
Medical/Disability -- The most common qualifying circumstance