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 Rhode Island, 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 certain limited circumstances, a debtor may qualify for a 'hardship discharge' if they are unable to complete the payment plan due to circumstances beyond their control. To be eligible for a hardship discharge, the debtor must demonstrate that the inability to complete payments is due to factors such as illness or a change in financial circumstances that were not the debtor's fault. The scope of debts that can be discharged under a Chapter 13 hardship discharge is generally similar to those in a Chapter 7 case, which means that certain types of debts like alimony, child support, certain taxes, and student loans typically cannot be discharged. This provision for hardship discharge is also applicable in Chapter 12 bankruptcy, which is designed for family farmers and fishermen. The specific application of these rules can be complex, and debtors considering a hardship discharge should consult with an attorney to understand their options and the likelihood of qualifying for such a discharge.