11 USC 1328: Chapter 13 Discharge, Exceptions, and Hardship Relief

A Chapter 13 discharge is the court order that wipes out the remaining balances on most debts covered by your repayment plan once you finish making payments. Section 1328 of the Bankruptcy Code sets the rules: a broad discharge for debtors who complete every payment, a narrower one for those who can’t finish because of genuine hardship, a list of debts that survive either way, and waiting periods that block a discharge if you got one too recently in an earlier case.¹

What You Get When You Finish the Plan

The main path is simple in concept. Make every payment under your confirmed plan, and the court eliminates what’s left on most debts the plan covered. Plans typically run three or five years depending on your income relative to the means test — below the median means a three-year commitment, above it means five.² If unsecured creditors received only pennies on the dollar during that period, the discharge erases the rest.

Debts the court formally rejected during the case (disallowed under Section 502) are discharged as well, so a creditor cannot resurface after the case closes with a claim the court already threw out.

One trap catches debtors off guard. If you took on new debt after plan confirmation, and that debt is governed by Section 1305(a)(2), and you could have gotten the trustee’s approval but didn’t, that debt is not discharged even if you completed every plan payment.¹ Run new obligations past your trustee before you take them on.

Debts That Survive Even a Completed Plan

Section 1328(a) carves out categories that stay with you no matter how faithfully you paid.

Long-Term Secured Debts

Debts where the last payment falls after the plan period ends, most commonly a home mortgage, are not discharged. The plan can cure missed payments and keep current ones flowing during its term, but the underlying loan continues after the case closes.³ Chapter 13 lets you catch up on a mortgage; it does not erase it.

Specific Unsecured Debts

Section 1328(a)(2) pulls in a list of non-dischargeable debts from Sections 507 and 523(a). In plain terms:¹

Domestic support obligations, including alimony and child support, whether they accrued before or after the bankruptcy filing.⁴
Certain tax debts, including obligations where a required return was never filed or was filed late (more than two years before the bankruptcy), taxes where the debtor filed a fraudulent return or willfully tried to evade payment, and trust fund taxes such as sales tax or income tax collected or withheld on behalf of a government.
Debts obtained by fraud or false pretenses, if a creditor proves the misrepresentation.
Debts from embezzlement, larceny, or breach of fiduciary duty.
Student loans and educational benefit overpayments, unless the court finds that repayment would impose undue hardship on you and your dependents. The Department of Justice issued guidance in 2022 encouraging more realistic assessments, but the standard remains difficult to meet.

Criminal Restitution and Fines

Any restitution obligation or criminal fine that was part of a sentence following a criminal conviction survives the discharge under Section 1328(a)(3). This covers both state and federal sentences.

Civil Damages for Willful Personal Injury or Death

Restitution or damages from a civil lawsuit where you willfully or maliciously caused personal injury or death are not discharged under Section 1328(a)(4). Debts from wrongful death or personal injury caused by driving while intoxicated fall here as well. Property damage is treated differently, as the next section explains.

The Chapter 13 Advantage Over Chapter 7

Finishing a Chapter 13 plan produces what practitioners call a “super discharge.” Section 1328(a)(2) only imports a subset of the non-dischargeable categories from Section 523(a), so several debts that would follow you out of a Chapter 7 case can be eliminated in Chapter 13.¹ Three categories in particular:

Willful or malicious damage to property. Section 523(a)(6) blocks this in Chapter 7. A completed Chapter 13 plan discharges it. Injury to a person still survives, as noted above.
Debts incurred to pay a non-dischargeable tax. If you borrowed money or ran up a credit card to pay a tax obligation Chapter 7 wouldn’t have wiped out, Chapter 7 won’t help with the new debt either. Chapter 13 will.
Property settlement debts from divorce. Divorce-related financial obligations that are not alimony or child support, such as a property division owed to an ex-spouse, survive Chapter 7 but can be discharged through a completed Chapter 13 plan.

For some debtors, this is a real reason to choose Chapter 13 over a Chapter 7 liquidation they would otherwise qualify for.²

The Hardship Discharge

Sometimes a debtor who started the plan in good faith simply cannot finish. A job loss, a serious illness, a permanent disability. Section 1328(b) allows the court to grant a discharge without full plan completion, but only if all three of these conditions are met:

The failure to complete payments is due to circumstances the debtor should not justly be held accountable for. Being laid off or developing a disabling medical condition likely qualifies. Quitting a job does not.
Unsecured creditors have already received at least as much as they would have gotten in a hypothetical Chapter 7 liquidation.
Modifying the plan is not practicable. Lowering payments or extending the term must be off the table given the debtor’s changed circumstances.

The scope is narrower than the standard discharge. Section 1328(c) makes any debt non-dischargeable under Section 523(a) survive a hardship discharge, meaning the super discharge advantage disappears. Willful property damage, divorce property settlements, and debts incurred to pay non-dischargeable taxes all survive a hardship discharge, just as they would in Chapter 7.

What the Court Checks Before Signing the Order

Making the payments is necessary, not sufficient. Several other conditions have to be satisfied before the court will enter a discharge.

Support Certification

If you owe domestic support, you have to certify that all amounts due through the certification date have been paid, including any pre-petition arrears the plan provided for.¹ Falling behind on support during or after the plan blocks the discharge even if every trustee payment was made on time.

Financial Management Course

You must complete an approved course in personal financial management after filing. This is separate from the pre-filing credit counseling requirement.⁵ Skip it and there is no discharge, no matter how well you kept up with payments.

Waiting Periods for Prior Discharges

If you received a discharge in a recent prior case, the court cannot grant another one in your current Chapter 13:

No discharge if you received one in a Chapter 7, 11, or 12 case filed within four years before the current case.
No discharge if you received one in a prior Chapter 13 case filed within two years before the current case.

The clock runs from filing date to filing date, not from the date the earlier discharge was entered. Miscount and you can complete a three-to-five-year plan only to be denied the discharge at the finish line.

After the Discharge

The Discharge Injunction

The discharge order does more than end your obligation to pay. Under Section 524(a), it voids any prior judgment on a discharged debt and permanently forbids creditors from starting or continuing lawsuits, garnishments, phone calls, collection letters, or any other collection activity directed at you personally.⁶ If a creditor ignores the injunction, you can ask the bankruptcy court to hold that creditor in contempt. The court has broad authority under Section 105 to enforce its own orders and sanction violators. Documenting the violation and moving quickly strengthens your position.⁷

Revocation

A discharge is not necessarily permanent. Under Section 1328(e), a creditor, the trustee, or another party in interest can ask the court to revoke a discharge if the debtor obtained it through fraud and the requesting party did not learn about the fraud until after the discharge was granted. The request has to be filed within one year of the discharge order. After that window closes, the discharge is final regardless of later-discovered fraud. The court must hold a hearing before revoking, and if it does, the previously discharged debts spring back to life.

Tax Treatment

Outside of bankruptcy, canceled debt is generally taxable income. Bankruptcy is different: debts eliminated through a discharge are excluded from gross income entirely, and you owe no federal income tax on the forgiven amounts.⁸ There is a trade-off. The excluded amount reduces certain tax attributes you would otherwise carry forward, such as net operating losses, tax credit carryovers, and property basis. You may still receive Form 1099-C from creditors reporting canceled amounts, but you should not include those amounts as taxable income. IRS Publication 908 covers the mechanics.

Credit Reporting

Under the Fair Credit Reporting Act, a bankruptcy case can appear on your credit report for up to ten years from the date of the order for relief, which is the filing date in most cases.⁹ That is the statutory ceiling. The major credit bureaus voluntarily remove completed Chapter 13 cases seven years from the filing date, three years earlier than the legal maximum. A dismissed case or one converted to Chapter 7 may follow different reporting timelines, and bureau policies can shift, so checking your report around the seven-year mark is worth the effort.

1
Office of the Law Revision Counsel. 11 USC 1328 – Discharge
2
United States Courts. Chapter 13 – Bankruptcy Basics
3
Office of the Law Revision Counsel. 11 USC 1322 – Contents of Plan
4
Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge
5
United States Department of Justice. Credit Counseling and Debtor Education Information
6
Office of the Law Revision Counsel. 11 USC 524 – Effect of Discharge
7
United States Courts. Discharge in Bankruptcy – Bankruptcy Basics
8
Internal Revenue Service. Publication 908 – Bankruptcy Tax Guide
9
Office of the Law Revision Counsel. 15 USC 1681c – Requirements Relating to Information Contained in Consumer Reports