What Debts Cannot Be Discharged In Bankruptcy?


The good news is that most debts are usually dischargeable.  A discharge eliminates the legal obligation to pay the debt that was discharged and prohibits any and all collection actions to attempt to collect the discharged debt.  The following is a partial list of the common types of debts that are not dischargeable.  This article does not provide information about the differences between a Chapter 7 discharge or Chapter 13 discharge.  Determining which debts cannot be discharged can be complicated.  Please seek counsel regarding your specific circumstances.

Income Taxes

Taxes owed to the Internal Revenue Service and in California, the Franchise Tax Board, are generally not discharged in bankruptcy unless the taxes meet the following requirements.  The income taxes could be discharged if they are three years old, filed on time, accessed 240 days prior to the case being filed , no fraud or willful evasion and returns were filed at least two years prior to the case being filed.

Student Loans

The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act eliminated the discharge of all private and government backed student loans.  Any debt incurred for an educational benefit overpayment, obligation to repay funds received as an educational benefit and debts for any other education loan that is a qualified education loan under the U.S. Bankruptcy Code.  Under certain circumstances student loans could be discharged by filing an adversary proceeding.

Domestic Support Obligations

If you are behind on your child support or spousal support payments as ordered by the state court the missed payments are not dischargeable.

Debts Incurred to Pay Nondischargeable Taxes

As part of the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act any debt incurred to pay a nondischargeable tax debt is not discharged.

Damages Caused While Intoxicated

If you caused a car accident and you were intoxicated at the time, any damages or claims resulting from bodily injury of the victims are not dischargeable.  Debts resulting from damage to property caused while you are intoxicated could be discharged.  Any debt for death or personal injury that you caused while intoxicated while operating a motor vehicle, vessel or aircraft are not dischargeable.

Any Money, Property, Services, Credit or Renewal of Credit Obtained by Fraud

If you received money, property, services, credit, renewal of credit or refinancing of credit because you made a false pretense, false representation or actual fraud, the resulting debt of the fraud is not dischargeable.

Purchase of Luxury Items Within 90 Days of Filing Bankruptcy

If you owe $500 or more to a single creditor for the purchase of $500 or more of what is considered luxury goods or services within 90 days before the bankruptcy case was filed the debt is not dischargeable.

Certain Cash Advances

Cash advances that total more than $750 obtained within 70 days before the bankruptcy case was filed are not dischargeable.

Post-Petition HOA Dues

If you own a home in an association and are behind on the monthly dues prior to the bankruptcy case being filed, all of the missed payments before the case is filed are dischargeable.  Once the case is filed the dues that come due each month are not dischargeable.  If you plan on surrendering your home and are not making the normal mortgage payment you will still be responsible for the post-petition HOA dues as long as the house is still in your name.

For more information about which debts are dischargeable, contact our bankruptcy lawyers in the Bay Area or our bankruptcy lawyers in San Francisco.