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 Hawaii, as in other states, Chapter 13 bankruptcy allows debtors to reorganize their debts and pay them off over a three to five-year period. Typically, a discharge is granted after the debtor completes all payments under the court-approved repayment plan. However, under 11 U.S.C. § 1328(b), a debtor may be eligible for a hardship discharge if they are unable to complete the plan payments due to circumstances beyond their control, such as illness or job loss, and if the debtor's creditors have received at least as much as they would have in a Chapter 7 liquidation case. Additionally, the debtor must not be at fault for the failure to complete the payment plan. The scope of a hardship discharge in Chapter 13 is similar to that of a Chapter 7 discharge, meaning that certain types of debts, such as alimony, child support, certain taxes, and student loans, typically cannot be discharged. This provision for hardship discharge also applies to Chapter 12 bankruptcy, which is designed for family farmers and fishermen.