Emory Bankruptcy Developments Journal


Abbie Schmadeke


Chapter 13 bankruptcy has long been heralded as a moral alternative to chapter 7 liquidations. Despite this, success among chapter 13 debtors is limited, and debtors who opt for this route face other challenges. The hardship discharge allows chapter 13 debtors to receive a discharge of their debts without plan completion. While the provision has been a piece of the bankruptcy law for nearly a century, little research on its effects on debtors exists. The struggles that chapter 13 debtors face underlies the need for more research on the hardship discharge as a potential solution. This Comment seeks to utilize empirical analysis to broaden the understanding of the hardship discharge and its use in bankruptcy courts. The data behind chapter 13 debtor outcomes and circumstances for which hardship discharges are granted present a compelling argument that expanding the hardship discharge could improve debtor success.

Part I of this Comment will provide an overview of chapter 13 bankruptcy. Part II will summarize some of the documented problems that debtors who go through chapter 13 face. Part III considers the evolution of the hardship discharge provision, leading to its current form today. Part IV consists of two parts of independent research: a quantitative review of 1100 chapter 13 debtor dispositions and a qualitative review of cases in which courts have granted a hardship discharge. Part V reinforces the need for expanding the hardship discharge.