The Male Debtor, who was the sole provider for the family, secured new employment in Colorado, and soon thereafter, the debtors and their children relocated accordingly. Subsequently, the Debtors sought a hardship discharge under 11 U.S.C. § 1328(b).
The Bankruptcy Court held that § 1328(b)(1) requires that the debtors’ inability to continue making plan payments must due to circumstances “beyond the debtors’ control.” The Debtor’s decision to relocate, particularly with increased income and job security, were not circumstances that justified a hardship discharge.
While there are some reasons for seeking a hardship discharge, such as where a junior mortgage was stripped off, it would usually seem that conversion to Chapter 7 seems a far better option, as the “bad faith” or “abuse” standards of U.S.C. §§ 707(a) or (b)(3) are more favorable for a Debtor that the “circumstances beyond the debtors’ control” requirement of § 1328(b).
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