Non-Dischargeable Debt Under Bankruptcy Law
The objective of both Chapter 7 and Chapter 13 bankruptcy is to obtain a “discharge” of debts. If the bankruptcy court discharges your debts in bankruptcy, it means that you will be no longer be held personally liable for these debts. Most consumer debts, including medical bills and credit card bills, are dischargeable. Certain debts, however, are non-dischargeable, meaning they cannot be wiped out through bankruptcy. These are debts that Congress has decided should not be able to be discharged for public policy reasons.
There are 19 categories of non-dischargeable debt. In other words, when you receive a discharge of your consumer debts, creditors will still be able to collect these categories of debts. Some non-dischargeable debts are not subject to a hearing, while other non-dischargeable debts will be discharged if a creditor does not challenge that they are dischargeable.
Generally, you will have to show extraordinary circumstances to get non-dischargeable debts discharged.
- Debts left off the bankruptcy petition, unless the creditor actually knew of the filing
- Many types of taxes
- Child support or alimony
- Debts owed to a child or ex-spouse arising from divorce or separation
- Fines or penalties owed to government agencies
- Student loans
- Personal injury debts arising out of a drunk driving accident
- Debts arising out of tax-advantaged retirement plans
- Condo or cooperative housing fee debts
- Attorneys’ fees for child custody or support
- Criminal restitution and other court fines or penalties
Other categories of non-dischargeable debts require a creditor to successfully challenge your discharge during the bankruptcy in order to be non-dischargeable. The court will hold a hearing that allows both the bankruptcy filer and the creditor to present their arguments. However, if the creditor fails to object, or if the court disagrees with the creditor, the debt will be discharged. These categories are credit card purchases for luxury goods worth more than $650 in aggregate that were made during the 90 days preceding the bankruptcy filing and are owed to a single creditor, fraudulently obtained debts or those obtained under false pretenses, and debts incurred because of willful and malicious injuries either to person or property.
Can the Court Deny a Discharge?
In some cases, the bankruptcy court will deny a Chapter 7 discharge for a debtor’s lack of compliance with rules or procedure. For example, if you commit perjury, fail to account for lost assets, destroy records, or hide property to defraud creditors, the court may not discharge your debts, even though they are otherwise dischargeable. Moreover, creditors, the bankruptcy trustee, or the U.S. Trustee can object to your discharge. However, the bankruptcy court has the final say.
A filer may be denied a discharge if they have failed to follow rules and procedures, or if they have received a discharge in another case within a certain window of time.
Discharges may be denied if you file bankruptcy too frequently within an impermissibly short window of time. For example, if you file successive Chapter 7 cases, you cannot receive a discharge in the second case if it is within eight years of the filing date for your first case. If you file successive Chapter 13 cases, you cannot obtain a second discharge within two years from the date you first filed for Chapter 13 bankruptcy.
When you are filing under two different chapters, the order determines how long you must wait to receive a discharge in the second case. For example, if you file for Chapter 13, you cannot file under Chapter 7 and receive a discharge within six years from the date you filed your Chapter 13 case, with certain exceptions. If you file Chapter 7 and receive a discharge, you cannot receive a second discharge in a Chapter 13 case filed within four years of your Chapter 7 filing.
Bankruptcy Law Center Contents
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Bankruptcy Law Center
- Automatic Stays Under Bankruptcy Law
- Chapter 7 Bankruptcy Law
- Chapter 13 Bankruptcy Law
- Chapter 11 Bankruptcy Law
- Chapter 12 Bankruptcy Law
- Repeat Bankruptcy Filings & Legal Requirements
- Business Bankruptcy Law
- Emergency Bankruptcy Filings & Legal Requirements
- Involuntary Bankruptcy Filings & Legal Requirements
- Credit Counseling and Debtor Education Courses Legally Required for Bankruptcy
- Joint Bankruptcy Petitions for Married Couples & Legal Implications
- Bankruptcy Exemption Laws
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Collections Laws and Bankruptcy
- Creditors' Legal Rights in Bankruptcy
- Medical Bills Under Bankruptcy Law
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Non-Dischargeable Debt Under Bankruptcy Law
- Credit Card Debt Under Bankruptcy Law
- Student Loan Debt Under Bankruptcy Law
- Vehicle Repossessions & The Legal Impact of Bankruptcy
- Wage Garnishment Under Bankruptcy Law
- Charge Offs in Bankruptcy Law
- Contingent, Unliquidated, and Disputed Claims Under Bankruptcy Law
- Personal Guarantees Under Bankruptcy Law
- Fraud-Related Debts Under Bankruptcy Law
- Bankruptcy Legal Procedures
- Eviction Legal Issues Related to Bankruptcy
- Foreclosure Legal Issues Related to Bankruptcy
- Lien Avoidance Under Chapter 7 Bankruptcy Law
- Lien Stripping Under Chapter 13 Bankruptcy Law
- How Unemployment Can Legally Affect Filing for Bankruptcy
- Protecting Your Assets During the Bankruptcy Legal Process
- Tax Law Issues Related to Bankruptcy
- Alternatives to Bankruptcy Under the Law
- Bankruptcy Legal Forms
- Elderly People Filing for Bankruptcy & Distinctive Legal Concerns
- Divorce Law Issues Related to Bankruptcy
- Preparing for the Bankruptcy Legal Process
- Employment Discrimination Laws Related to Bankruptcy
- Working With a Bankruptcy Lawyer
- Bankruptcy Law FAQs
- Find a Bankruptcy Lawyer
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