Debt Free

Are all debts discharged in bankruptcy?

Not all debts are discharged. The debts discharged vary under each chapter of the Bankruptcy Code. A slightly broader discharge of debts is available to a debtor in a Chapter 13 case than in a Chapter 7 case. Section 523(a) of the Bankruptcy Code specifically excepts various categories of debts from the discharge granted to individual debtors. Therefore, the debtor must still repay those nondischargeable debts after bankruptcy. The most common types of nondischargeable debts are certain types of tax claims, debts for domestic support obligations, debts for willful and malicious injuries to person or property, debts to governmental units for fines and penalties, debts for most government funded or guaranteed educational loans or benefit overpayments, debts for personal injury caused by the debtor’s operation of a motor vehicle while intoxicated, and debts owed to certain tax-advantaged retirement plans. Other types of debt, such as obligations incurred as the result of fraud, embezzlement, or willful injury may be excepted from discharge if the creditor successfully brings a nondischargeability action against the debtor.