What Debts Are Not Discharged in Bankruptcy?

A bankruptcy discharge can eliminate a person's legal obligation to pay many debts, but it does not erase every debt or every interest in property. The result depends on the kind of debt, the bankruptcy chapter, the facts behind the obligation, and sometimes a separate ruling by the bankruptcy court.

This guide explains the main categories in general terms. It cannot determine how a particular debt will be treated.

What a discharge does

A discharge is a federal court order that generally bars creditors from trying to collect discharged debts as the debtor's personal liability. According to the U.S. Courts overview of discharge, a valid lien can remain attached to property even when personal liability on the underlying debt is discharged.

That distinction matters. For example, a discharge may remove personal liability on a mortgage note while the mortgage lien remains on the home. If payments stop, the creditor may still have rights against the property under applicable law.

Debts that commonly survive bankruptcy

Federal bankruptcy law identifies several categories that are generally not discharged. Common examples include:

• certain taxes and tax claims;
• domestic support obligations such as child support and alimony;
• many government-backed or nonprofit educational loans and benefit overpayments, unless the bankruptcy court makes the findings required by law;
• debts for death or personal injury caused by operating a motor vehicle while intoxicated;
• certain criminal restitution and fines;
• debts that were not properly listed or scheduled in circumstances where the creditor did not receive legally sufficient notice; and
• some debts arising from fraud, fiduciary misconduct, theft, intentional injury, or particular credit activity before filing.

The list is not interchangeable across chapters. The Bankruptcy Code's exceptions to discharge contain definitions, exceptions, and procedural requirements that can affect the result.

Some exceptions require a court case inside the bankruptcy

For some debt categories, a creditor must file an adversary proceeding, which is a lawsuit within the bankruptcy case, and obtain a ruling that the debt is not dischargeable. Fraud and willful-injury allegations are common examples.

Other obligations, including many domestic support obligations and certain taxes, can survive without that kind of creditor lawsuit. Deadlines and burdens differ by issue. The docket, notices, and local bankruptcy rules are important sources for a pending case.

Student loans use a separate standard

Educational debt does not all fit one simple rule. Many government-backed or nonprofit educational loans are excepted from discharge unless the bankruptcy court finds that repayment would impose the legally required level of hardship. A debtor generally seeks that determination through an adversary proceeding.

Private education debt also requires classification. Some private obligations fall within federal education-loan exceptions and some do not. The lender's label alone does not resolve the question. Loan documents, the school, the amount borrowed, and how the funds were used can matter.

The U.S. Department of Justice publishes information about its process for handling certain federal student-loan discharge cases, but a court makes the dischargeability decision.

Taxes require a fact-specific timeline

The word “taxes” covers different debts. Income taxes, trust-fund taxes, tax liens, penalties, and recently assessed taxes can receive different treatment. Filing dates, due dates, assessment dates, returns, extensions, and prior proceedings can all matter.

Even when personal liability for a tax is discharged, a preexisting tax lien may remain against property. Tax records and account transcripts provide more reliable information than a balance shown on a single notice.

Support and divorce-related debts are not the same category

Domestic support obligations generally are not discharged in Chapter 7 or Chapter 13. Other debts created by a divorce or separation agreement may be treated differently depending on the chapter and the nature of the obligation.

A label in a divorce decree does not always control the bankruptcy classification. Courts can consider the substance and function of the obligation. Bankruptcy also does not modify child custody or dissolve a marriage.

Chapter 7 and Chapter 13 do not have identical discharges

Chapter 7 typically produces a relatively prompt discharge for an eligible individual after administration of the case. Chapter 13 generally requires completion of a court-approved repayment plan before the standard discharge is entered.

The categories excluded from a standard Chapter 13 discharge overlap substantially with Chapter 7, but they are not identical. A hardship discharge in Chapter 13 is narrower. The U.S. Courts Chapter 13 overview describes the basic plan and discharge framework.

Secured debts, liens, and reaffirmation

Secured debt involves both personal liability and a creditor's interest in collateral. Bankruptcy can affect those two components differently.

Possible issues include:

• whether the lien is valid and properly perfected;
• whether payments remain current;
• whether the debtor claims an exemption;
• whether the trustee has an interest in the property;
• whether a Chapter 13 plan changes payment terms allowed by law; and
• whether a reaffirmation agreement is proposed in Chapter 7.

A reaffirmation agreement can preserve personal liability that otherwise might be discharged. It is a formal agreement subject to Bankruptcy Code requirements, disclosures, filing rules, and sometimes court review.

A practical way to organize the question

For each debt, the useful source records usually include the creditor name, account number, balance, collateral, agreement, payment history, collection or lawsuit documents, and the event that created the debt. Tax transcripts, divorce orders, criminal judgments, and loan documents can be especially important for the categories they address.

A written list can separate three different questions:

1. Is personal liability potentially dischargeable?
2. Is there a lien or other right against property?
3. Is a separate court filing or ruling required?

Those questions help explain why “included in the bankruptcy” and “discharged” are not always the same thing.

Where to find authoritative information

The U.S. Courts Bankruptcy Basics pages explain the federal process. Bankruptcy court websites publish local rules, forms, calendars, and self-help information. A licensed bankruptcy attorney can analyze a particular debt, chapter, deadline, and court record.

This page provides general legal information, not legal advice. Bankruptcy outcomes depend on the facts, chapter, court rulings, and law applicable to the case.