Non-Dischargeable Debts in Bankruptcy- Debts You Can't Eliminate

The bankruptcy code lists debts that you cannot eliminate as part of your Chapter 7 or Chapter 13 bankruptcy. If the debt is not eliminated as part of your bankruptcy, then you are still responsible for paying back the debt. Section 523 of the Bankruptcy Code lists debts that are considered non-dischargeable in bankruptcy. Some debts will not be discharged in the bankruptcy regardless of whether the creditor takes any action and other debts the creditor must file an adversary proceeding to prove that the debt falls into a category of debt that is non-dischargeable. You cannot eliminate the following debts as part of your bankruptcy case:

1. Income Taxes -other Federal and State Taxes

• Taxes that meet the following requirements can be discharged in the bankruptcy

  Must have been due more than 3 years ago

  Must have been filed on time or filed more than 2 years ago

  Must have been assessed more than 240 days ago

  Must not involve a fraudulent return or willful attempt to evade taxes 2.

2. Domestic Support Obligations- child support and alimony

3. Fine, penalties and forfeitures that are owed to a governmental unit

4. Student Loans and any obligation to repay funds that were received as an education benefit, scholarship or stipend

• Student Loans can be discharged if you can show that it would result in an undue hardship to you and your dependents

5. Judgment from Driving While Intoxicated- Death or personal on injury that were caused while operating a motor vehicle while intoxicated .

6. Owed to a former spouse, spouse or child -that where incurred as part of a divorce or separation or are part of divorce or separation agreement.

• Example: If in your divorce you were assigned certain marital debts and you agreed to hold your ex-spouse harmless for the debts, then these debts are not technically discharged.

7. Home Owner Association Fees that accumulate after the filing of your bankruptcy case and before the home is foreclosed on.

8. Fraud, false pretenses, or false misrepresentation- Debts incurred for property, money, and services that were obtained from fraud, false pretenses or false representation.

• A debt owed to a single creditor for more than $500 dollars for luxury goods within 90 days of filing for bankruptcy fall into this category.

• Cash advances that total more than $750 within 70 days before the filing of your bankruptcy case are presumed non-dischargeable.

9. Debts for willful or malicious injury

10.Debts involving embezzlement, fraud, and larceny

If you are not certain if one of your debts falls within one of the categories and can be discharged then consult with an experienced bankruptcy attorney.