What debts cannot be discharged in bankruptcy?

Automatic exceptions

These debts are not discharged even if the creditor does nothing in the bankruptcy case (11 U.S.C. § 523):

• Domestic support obligations — child support, alimony and other support owed to a spouse, former spouse or child.
• Most taxes — income taxes for recent years, taxes where no return was filed or a return was filed late within two years before bankruptcy, and taxes involving fraud or evasion. Trust-fund taxes, such as payroll taxes withheld from employees, are never dischargeable.
• Student loans — federal and most private education loans, unless the debtor proves “undue hardship” in a separate lawsuit within the case.
• Criminal fines, penalties and restitution.
• Debts for death or personal injury caused by driving while intoxicated.
• Debts not listed in the bankruptcy schedules, in some cases, if the creditor did not know about the case in time.
• Certain condominium and HOA fees that come due after filing.
• Loans from retirement plans, such as a 401(k) loan.
• Debts from a previous bankruptcy in which discharge was denied or waived.

Debts that survive only if the creditor objects

Some debts are discharged unless the creditor files a timely complaint in the bankruptcy court, usually within 60 days after the first date set for the meeting of creditors, and proves its case:

• Fraud — debts obtained by false pretenses, false statements or actual fraud, including lying on a loan application.
• Presumed fraud — luxury purchases over a set amount from one creditor, or cash advances over a set amount, made shortly before filing.
• Embezzlement, larceny, or fraud by a fiduciary.
• Willful and malicious injury to another person or their property.
• Property settlement debts from a divorce (non-support) — dischargeable in Chapter 13 but not Chapter 7.

Student loans: the undue hardship test

Most courts use the Brunner test: the debtor cannot maintain a minimal standard of living while repaying, the situation is likely to persist, and the debtor has made good-faith efforts to repay. Since late 2022, the Department of Justice and Department of Education have used a streamlined attestation process for federal student loans, and more borrowers have obtained full or partial discharges. It remains a separate adversary proceeding, and income-driven repayment and forgiveness programs are alternatives worth considering.

Taxes: when they can be discharged

Income taxes can often be discharged if all of these are true: the return was due more than three years before filing, the return was actually filed more than two years before filing, the tax was assessed more than 240 days before filing, and there was no fraud or willful evasion. Tax liens already recorded may survive against property even if the personal liability is discharged.

Secured debts and liens

A discharge eliminates personal liability, but a valid lien remains on the property. If you keep a house or car with a loan, you must keep paying to avoid foreclosure or repossession, even though you would no longer be personally liable for any deficiency after surrender.

Chapter 13's broader discharge

Chapter 13 discharges a few debts that Chapter 7 does not, such as non-support divorce property settlements and debts for willful (but not malicious) property damage. Support, most student loans, most taxes, DUI injury debts and criminal restitution still survive.

Reaffirmed debts

A debt the debtor voluntarily reaffirms during the case, usually a car loan, is not discharged. Reaffirmation agreements can be rescinded within 60 days after filing with the court or before discharge, whichever is later.

Getting advice

Whether a particular debt survives often turns on dates and details. A bankruptcy lawyer can review tax transcripts, loan records and divorce decrees before filing to predict which debts will be eliminated.

Listing every creditor in the schedules, even ones you plan to keep paying, protects you: an omitted debt can create avoidable disputes later, especially in cases with assets. A reaffirmed or surviving debt should be budgeted for before filing so the fresh start is real.