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 South Carolina, as in other states, Chapter 13 bankruptcy allows debtors to reorganize their debts and pay them off over a three to five-year period. If a debtor is unable to complete the payment plan due to circumstances beyond their control, they may be eligible for a hardship discharge. This type of discharge is less comprehensive than the discharge at the end of a successful payment plan but is similar to a Chapter 7 discharge in terms of the debts it can eliminate. To qualify for a hardship discharge, the debtor must demonstrate that the inability to complete payments is due to unforeseen circumstances, such as illness or job loss, and that 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. An attorney can help navigate the specific requirements and process for obtaining a hardship discharge in a Chapter 13 bankruptcy in South Carolina.