Hardship Discharge Possible?

[mike14]

My 65 year-old husband's neurologist has just advised that he needs 24/7 Care in a long term care facility. Of course I have to continue working to pay the bills, mortgage and the Trustee. His disability income will be diverted to pay for his care. We have completed 24 months of our Chapter 13. Can I apply for a Hardship Discharge or will the Trustee force me to Sell our home to reduce costs so I can complete the 60 months? Any advice or opinions would be greatly appreciated.

[justbroke]

What State do you live in?

A hardship discharge has some requirements. First, you must not be able to pay creditors in the Chapter 13. Second, you must have paid the creditors at least as much as they would have received in a Chapter 7. And third, a Chapter 7 conversion would not be possible. If a conversion to Chapter 7 is easier, then you'd just convert to Chapter 7 and be done anyhow. (A hardship discharge is not about paying the "plan minimum" so liquidation of payment is more based on what you owe to secured creditors and the liquidation value if it were a Chapter 7.)

So, the real question, which you elude to, is the liquidation factor (my second requirement). If you are in a State, such as Florida, where the homestead is untouchable, then you would not have fear of this liquidation of the homestead. (Unless you kept other property and had a minimum amount to pay to the unsecured creditors in the Chapter 13.)

The best way to find more about this, is to consult with your Chapter 13 attorney. You will want to see if conversion is better than a hardship discharge.

[mike14]

Thanks, JB;

We live in Ohio and our house, which used to have plenty of equity (owned for 20 years) has dropped in value to the point we are underwater, as per formal appraisal prior to the BK. We were termed a "no asset" case, although I'm not sure what all that entails. We were scheduled for about a 20% payback. I plan to write our attorney tomorrow, but wanted to know if there were any obvious reasons to avoid this road.

[AngelinaCat]

Hi mike14, I cannot offer any pearls of wisdom at this point, but I certainly can, and do offer lots of {{{{{{{HUGGSSS}}}}}}} and prayers for you and your DH!!!

[mike14]

Thank you AC;

Apologies for not getting back sooner. Thank you for your good wishes, they are much appreciated. I am still waiting on a response from our attorney. I worked yesterday and had forgotten that it was a holiday at the attorney's office.