Although a Chapter 13 bankruptcy debtor generally receives a discharge only after completing all payments required by the court-approved (confirmed) repayment plan, there are some limited circumstances under which the debtor may request the court to grant a hardship discharge even though the debtor has failed to complete plan payments. Such a discharge is available only to a debtor whose failure to complete plan payments is due to circumstances beyond the debtor's control.

The scope of a Chapter 13 bankruptcy hardship discharge is similar to that in a Chapter 7 bankruptcy case with regard to the types of debts that are excepted from the discharge. A hardship discharge is also available in Chapter 12 bankruptcy if the failure to complete plan payments is due to circumstances for which the debtor should not justly be held accountable.

In Delaware, as in other states, Chapter 13 bankruptcy allows debtors to keep their property and pay debts over time, usually three to five years. However, if a debtor encounters circumstances beyond their control that prevent them from completing their repayment plan, they may be eligible for a hardship discharge. The conditions for a hardship discharge include: the debtor's inability to continue plan payments due to circumstances beyond their control; the creditors have received at least as much as they would have in a Chapter 7 liquidation case; and modification of the plan is not feasible. If these conditions are met, the court may grant a hardship discharge, which releases the debtor from most types of debts, similar to a Chapter 7 discharge. However, certain debts such as alimony, child support, certain taxes, and student loans typically cannot be discharged. Chapter 12 bankruptcy, designed for family farmers and fishermen, also allows for a hardship discharge under similar conditions. It's important to consult with an attorney to understand the specific implications of a hardship discharge in a Chapter 13 or Chapter 12 case.