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 Utah, 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 apply for a hardship discharge. The requirements for a hardship discharge in Utah follow the federal Bankruptcy Code, which stipulates that the debtor must demonstrate that the inability to complete payments is due to circumstances beyond their control, the debtor has paid at least as much as what creditors would have received in a Chapter 7 liquidation case, and modification of the plan is not feasible. A hardship discharge will not cover all types of debts; for example, certain taxes, student loans, alimony, child support, and debts from personal injury caused by driving under the influence are not dischargeable. The scope of a hardship discharge in Chapter 13 is more limited than a full discharge and is similar to the discharge in a Chapter 7 case. This provision is also applicable in Chapter 12, which is designed for family farmers and fishermen, under similar conditions where the debtor is not accountable for the failure to complete payments.