What Debts Are Not Subject to Bankruptcy Discharge?

Certain obligations called nondischargeable debts have been deemed too important to be eliminated in bankruptcy and therefore these debts will not wiped out even if you successfully file for Chapter 7 or Chapter 13. Another class of obligations can be made nondischargeable if creditors successfully object to the discharge and give the court specific reasons a discharge is not appropriate. With respect to those obligations, the court will evaluate whether the creditor’s challenge is appropriate. If the court finds the creditor’s challenge proper, that debt will not be discharged, but conversely, if the court does not agree with the creditor, there will be a discharge.

Categories of Nondischargeable Debts

There are 19 categories of nondischargeable debt in the Bankruptcy Code. They are typically designated as nondischargeable for public policy reasons, either because of the nature of the debt or because the debt was incurred due to illegal conduct. There may be extraordinary circumstances under which you can petition the court to discharge these debts, but usually you will still be liable to the creditors for nondischargeable debts even after your other debts have been discharged.

The categories of nondischargeable debts include:

• Debts that a debtor does not list on his bankruptcy petition or mailing list unless the creditor knows of the bankruptcy filing;
• Certain tax debts;
• Debts for spousal support or child support;
• Debts owed to a former spouse or child that arose from a divorce or separation;
• Debts for fines or penalties owed to government agencies;
• Student loans;
• Debts for personal injury caused by a debtor’s operation of a motor vehicle while drunk driving;
• Debts owed on certain retirement plans;
• Debts for certain condo or cooperative housing fees;
• Attorneys’ fees for child support or child custody; and
• Court fines and penalties including criminal restitution.

How Does a Creditor Successfully Object to Dischargeability?

As noted above, certain debts are subject to a different discharge procedure: the creditor must specifically ask the court not to discharge a particular debt. One such debt is credit card purchases of $650 worth of luxury goods owed to a single creditor incurred within 90 days of filing for bankruptcy. A creditor may object to discharge of a particular debt by showing how it fits into this category. However, if you show the court that you intended to repay the debt in question, or that the charges aren’t for “luxury” items, the debt will be discharged anyway. Other debts subject to creditor objections are debts obtained by fraud or debts incurred because of willful and malicious injury to someone else or his property.

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