Non-dischargeable debts are debts that can’t be eliminated in a bankruptcy because the U.S. Bankruptcy Code doesn’t allow it. Some non-dischargeable debts are given this special status because the type of debt is such that there is a public policy interest in not allowing filers to eliminate it. Other debts are non-dischargeable because of the way they were incurred, such as criminal restitution. The following debts cannot be discharged in Chapter 7 banruptcy
Alimony and Child Support are Non-Dischargeable Debts in Bankruptcy
Domestic support obligations, like alimony and child support are always considered non-dischargeable debts in bankruptcy. You can't get rid of past due domestic support payments by filing a bankruptcy case. Additionally, since domestic support obligations are one of the few exceptions to the automatic stay, family court actions for the establishment or modification of domestic support obligations are allowed to continue even after a bankruptcy case is filed. If your wages are being garnished for current or past due child support obligation, the bankruptcy filing will not stop the wage garnishment.
Student Loans are Non-Dischargeable Debts in Bankruptcy (A lot of the Time)
Most people know that student loan debt generally can't be discharged in bankruptcy. This is true in Chapter 7 and Chapter 13 cases. However, there are some cases where a filer is able to get a bankruptcy discharge for all or part of their student loans. Requirements for such a discharge are very hard to meet.
Most Income Taxes are Non-Dischargeable Debts in Bankruptcy
Recent income tax debts survive a Chapter 7 bankruptcy filing. Some older income tax debts can be eliminated even in a Chapter 7 bankruptcy, but only if certain requirements are met. The bankruptcy has to be filed more than 3 years after the tax return was due and more than two years after the return was filed. Any taxes assessed in the 240 days before the bankruptcy filing can't be discharged even if the other requirements are met. Additionally, if the IRS can prove fraud or tax evasion on your part, the tax debt remains non-dischargeable no matter how old the debt is.
Secured Debts are Sometimes Non-Dischargeable
Secured debts are treated differently because they're connected to a specific piece of property, such as a car loan or a home, in the case of a mortgage. Outside the context of bankruptcy, if you stop making your car payment, your car is repossessed. So, you can't stop making your payments and keep the car anyway just because you filed a Chapter 7 bankruptcy. In other words, filing bankruptcy is not a way to get to a free car. Since this is a topic that comes up frequently, check out this detailed guide on how this works for cars.
Other Non-Dischargeable Debts in Bankruptcy
Examples of other non-dischargeable debts in a Chapter 7 bankruptcy case include:
Other government debt such as fines and penalties, including traffic tickets and court fines
Restitution for criminal acts
Debt arising from fraud or false pretenses
Debts you intentionally did not include in your bankruptcy forms
Damages related to a DUI accident