On December 27, 2020, the Consolidated Appropriations Act (the “Act”) was signed into law. Among other changes, the Act creates a new subsection (i) of section 1328 of the Bankruptcy Code which permits a court to grant a regular (not hardship) Chapter 13 discharge, even if the debtor is not current on no more than three residential mortgage payments. The debtor’s delay in payments on the mortgage must have (1) been caused by financial hardship related to the pandemic, or (2) the plan must provide for curing the default or the debtor must have entered into a forbearance agreement.

The debtor should request a 1328(i) discharge by motion, and the statute requires notice and a hearing. In CM/ECF, filers should use the event Bankruptcy Events> Motions/Applications> Discharge Case Pursuant to 1328(i). This new event will be live on Monday, Feb. 22.

Note that the provisions of the Act will remain in effect until December 27, 2021.