Question Hardship Discharge Due to Medical Recent Issue?

[AndHereWeAre]

Hi,

We are two years and 8 months into our 5 year C13.

We've always paid the Trustee on time each month.

This past Saturday, I tore my Achilles Tendon just walking in a parking lot.

I'm getting medical consults but it is not looking good so far - surgery being required due to a variety of issues.

But beyond the medical issues, I'm also now very worried about out C13.

Consults and a MRI cost money.

I just paid $200 for an AirCast boot to immobilize the foot.

Also had to buy a knee scooter.

Then comes surgery, plus up to a year of follow up doctor visits and PT (I will not even be walking until 3-6 months I'm told so far ).

We have insurance but it is a high-deductible plan and some things are simply not covered, so much will be out-of-pocket for us.

All of that is going to add up and like everyone here, we are already on a tight budget due to C13.

I saw online about a hardship discharge.

Is that something we should even consider bringing up to our attorney and/or does anyone have any other suggestions?

Thanks!

[Barbisi]

I am very sorry to hear of your torn Achilles Tendon, AndHereWeAre , and hope you are able to receive all the care and treatments you need to return to full body function. (I well remember that AirCast boot- no fun to have to navigate up and down stairs, in the car, etc.)
I luckily never had to have surgery on my left ankle while in our BK13 despite many close call injuries, weekly treatments, numerous MRIs and many frustrating consults with pompous doctors who wanted nothing else but to totally dissect my totally compromised ankle and leave me limping the rest of my life.
One thing you haven't mentioned is how this long-term medical layup will affect your income. Are you providing part of the BK13 monthly payback from your job? If so and if you will be unable to work for even a little while, the BK trustee will have to consider a hardship discharge or at least a temporary cessation of the plan if you can't make the payments due to loss of regular income.
You should definitely discuss the ramifications of this surgery and lengthy recovery with your attorney as this is bound to affect your plan in some way if not seriously jeopardize it.
shipo , despritfreya , justbroke, flashoflight , Carmella , sophieanne , what advise can you all give?
I wish you the best going forward and Happy Holidays! Good Luck always.

[despritfreya]

A Section 1328(b) hardship discharge is similar to a discharge under a Chapter 7. One can apply for it under these conditions:

(b) . . . at any time after the confirmation of the plan and after notice and a hearing, the court may grant a discharge to a debtor that has not completed payments under the plan only if—

(1) the debtor’s failure to complete such payments is due to circumstances for which the debtor should not justly be held accountable;

(2) the value, as of the effective date of the plan, of property actually distributed under the plan on account of each allowed unsecured claim is not less than the amount that would have been paid on such claim if the estate of the debtor had been liquidated under chapter 7 of this title on such date; and

(3) modification of the plan under section 1329 of this title is not practicable.

The second prong of the above is where issues tend to pop up. You cannot apply for the discharge if you have not already met what is called "chapter 7 reconciliation" - paid to the unsecured creditors an amount sufficient to cover any non-exempt assets.

You need to talk to your attorney. Depending upon your situation and original reason to file, maybe a dismissal is in the cards. If, as you indicate, your medical bills will be a lot, once you are finished treating maybe you will want the ability to file a Chapter 7 to include them. If you obtain a discharge now (in the 13 or a conversion to 7 of your current case before you finish treating), you will be on your own with paying the medical bills not covered by insurance or due to the high deductible.

Des.

[AndHereWeAre]

Thanks for the kind words, Barbisi!

pompous doctors who wanted nothing else but to totally dissect my totally compromised ankle and leave me limping the rest of my life.

First consult I had, that doc wanted to do some crazy stuff as well...

As to your question about work, I'm lucky in that regard. I can work remotely (although normally I travel some and am in office). So that's good.

We pay the trustee directly.

What is very concerning to me is beyond the surgery, the "bills out of nowhere" that are going to pop up. Case in point - I have an MRI scheduled for Monday. The provider's office just casually sent an email via their portal that I have to pay $646 after insurance for the MRI, before I get it.

Pretty sure this won't be the last one either.

Oh, and I should also mention one of my kids is probably going to need braces to correct an overbite :-(

Anyway, thanks very much for your advice and Merry Christmas!

[AndHereWeAre]

Appreciate the insights, despritfreya !

To be honest, I don't know if we have met or not that threshold you mentioned e.g. Chapter 7 reconciliation

Seems to me you are right, we've got to bring the attorney into the loop and see what he thinks our options are given the specifics of our case.

Thanks and Merry Christmas!

[Barbisi]

AndHereWeAre, I wish you well on the results of your MRI - maybe if the Achilles is only partially torn, you can avoid surgery and instead do more intense PT! (Just a thought, I know!)
That is helpful that you can work from home while you recover from surgery, if it comes to that. Good luck on the braces for your little one too!
My ankle needed a cortisone shot in the ankle joint, dry needling in the abductor hallucis and a round of shockwave therapy sessions to avoid surgery in 2021 while we were still in BK13. Since then, I haven't had as much trouble (knock on wood) because I massage and stretch the foot daily as well stand on my toes to keep the arch area fluid in movement and not too flat. We also relocated to a rental where I don't have a flight of stairs to navigate up and down dozens of times every day, like I did when we had to live in our former Colorado home which we were able to sell in May.
Keep us abreast of developments and how you are coping going forward - Merry Christmas to you as well!

[Carmella]

Definitely talk to your lawyer to see what the best course of action will be. When you tell him your situation, he should be able to tell you what your options are.