If the debtor has made the majority of his plan payments in the Chapter 13 plan but can not continue he/she may ask for an early discharge. The debtor cannot cause his own problems and then complain about how he cannot complete the plan and the debtor must have done his best efforts to complete the plan.
If the debtor has become disabled he will often be allowed an early discharge. However, if he simply bought a car without court approval and then can’t afford the Chapter 13 or quit his job he is not allowed to complain about it.
If the Debtor simply needs a short period of time without payments or needs his payments lowered the debtor should instead modify the plan or ask for a temporary order allowing him or her to suspend payments for a couple of months. A common example is a short maternity leave.
Chapter 13 Plan Modifications
The debtors payments can be increased or decreased. All of the debtor’s disposable income is required to be paid in a Chapter 13 plan. Hiding income or the failure to turn over a tax refund may prevent a discharge. But if the debtors income is lowered the plan payments can be lowered or the Chapter 13 can be converted to a Chapter 7. The plan can also be increased if the debtor obtains a higher paying job.
A debtor normally can’t pay off the plan early because rules generally require the debtor to commit all of his disposable income for a period of time. This period of time is 36 months for persons that earn less than the average wage for their size family and 60 months if you earn over the average wage. It is far easier to file a new budget and ask the court to reduce or suspend plan payments rather than obtain an early discharge.