What debts cannot be discharged in bankruptcy?
In general: • Liens, such as mortgages and security interests in cars are non-dischargeable as are some other types of obligations including: Federal, State and local tax claims (subject to specific time rules) • Customs duties • Spousal and Child support • Most student loans • Secured debts • Fines and penalties imposed by government agencies • Debts incurred due to false statements made with the intent to deceive • Fraud committed in a fiduciary capacity, such as embezzlement or larceny • Punitive damage claims for “willful and malicious” acts • Debts not list on the forms filed with the Court • Drunk driving obligations A non-dischargeable debt is one that will survive the bankruptcy proceeding. The debtor still has the obligation to pay this debt; the creditor has every right to collect.
Debts not discharged in bankruptcy include alimony, child support, taxes due less than three years, student loans, criminal restitution, debts resulting from driving while intoxicated, debts arising from fraud, debts from substantial uses of credit cards just prior to filing bankruptcy, and debts from willful and malicious damage to others or their property. There are other smaller exceptions. The exceptions to discharge are often hard to understand and apply, and the way judges apply the exceptions varies from state to state. This is an area where the advice of an experienced bankruptcy attorney is usually required.
