What Is Hardship Discharge
A hardship discharge is one of the options an individual debtor can have under Chapter 13. The question is, can it be beneficial to the debtor, whether it is a business or an individual?
Is it really the right path for a troubled individual or company to choose? What are its benefits and drawbacks?
When someone files for Chapter 13 protection from their creditors, it is possible for that someone to be qualified for a hardship discharge from his debts. How can it help your fortunes as a businessman? On the other hand, what qualifies a debtor to seek a hardship discharge?
The truth is, the principles are pretty simple for a debtor to seek a hardship discharge. It’s quite simple in theory but in actual application, the process can take some time to accomplish. Simply put, if you can prove to the court that you don’t have the means to settle your debts because of circumstances beyond your control, and then the Court can grant you hardship discharge after a process. If you can show the Court that your business is foundering under uncontrolled circumstances like economical reasons – which are beyond your control --- then you can get a hardship discharge from your debts.
Another circumstance that a person can qualify for hardship discharge is when there has been enough efforts expended at liquidation under Chapter 7, and yet no improvements have been observed. This would warrant a modification in the restructuring plan. However, if no modification is proved to be feasible enough to remedy the financial situation, you then as a debtor can then qualify to be discharged from your obligations to your creditors.
However, some situations may not be feasible enough for a hardship discharge. For example, it is better for a debtor to effectively negotiate and work with individual debtors in order to restructure and reorganize his debts. That is because not all kinds of debts can be discharged and you can still find yourself facing several other debts, including tax issues. A hardship discharge also does not help you reorganize your debts in order to keep up with your obligations on terms that will be beneficial or friendly to your reduced income as an individual or corporation under bankruptcy protection.
Another issue is that seeking a hardship discharge alone can be a lengthy and tedious process in by itself. Not to mention the fact that the process of seeking a hardship discharge can make you spend a lot more money to pay your attorneys as they lobby your case to the court. This can be detrimental when you’re trying to save up your business and realize more income than expenses.
The best way to find out if hardship discharges are beneficial to your case as a debtor in bankruptcy is to consult a bankruptcy lawyer.
- Franchise Opportunities
- Wholesale Business Opportunities
- Small Manufacturing Business
- Farming Business Ideas
- Unique Business Opportunities
- Shop Business Ideas
- Small Business Opportunities
- Startup Company Ideas
- Home Based Business Opportunity
- Rural Business Opportunities
- Tips for Buying and Selling
- Starting Rental Business
- Ideas for Small Business
- Free Business Ideas
- Internet Business Ideas
- Store Business Opportunities
- Entrepreneur Business Idea
- Retail Store Ideas
- Service Business Ideas
- Advice for Small Business
- Financing a Small Business
- Restaurant Business Opportunities
- Small Business Articles
- Business Marketing and Advertising
- Repair Business Opportunity
- Professional Career Opportunities
- Business Insurance Information
- Instructor Guides