What debts are nondischargeable in bankruptcy?
Section 523(a) lists 19 categories of nondischargeable debts, including most tax debts, student loans, child support, alimony, debts from fraud or false pretenses, DUI-related injuries, government fines, and debts not listed on your bankruptcy schedules. Each exception has specific elements that must be proven.
Are student loans dischargeable in bankruptcy?
Student loans can be discharged, but only if you can prove 'undue hardship' through an adversary proceeding. Most courts use the Brunner test, which requires showing you cannot maintain a minimal standard of living, your situation is likely to persist, and you made good-faith efforts to repay.
Can I discharge tax debt in bankruptcy?
Some tax debts are dischargeable if they meet specific criteria: the tax return was due more than 3 years ago, the return was filed more than 2 years ago, the tax was assessed more than 240 days ago, and no fraud or willful evasion was involved. These are commonly called the '3-2-240' rules.
Is child support dischargeable in bankruptcy?
No. Child support and alimony are classified as domestic support obligations under Section 523(a)(5) and are never dischargeable in any chapter of bankruptcy. These debts survive both Chapter 7 and Chapter 13 discharge.
Can credit card debt be declared nondischargeable?
Generally, credit card debt is dischargeable. However, a creditor can challenge discharge if they prove the charges were incurred through fraud, false pretenses, or false financial statements. Luxury purchases over $800 within 90 days of filing create a presumption of fraud under Section 523(a)(2).
What happens if a debt is not listed in my bankruptcy?
Unlisted debts may be nondischargeable under Section 523(a)(3) if the creditor did not receive notice of your bankruptcy in time to file a proof of claim or object to discharge. In no-asset Chapter 7 cases, courts sometimes still discharge unlisted debts if the creditor would have received nothing anyway.
Are personal injury debts from drunk driving dischargeable?
No. Debts for death or personal injury caused by driving while intoxicated are nondischargeable under Section 523(a)(9). This applies to both Chapter 7 and Chapter 13 cases and covers judgments, settlements, and restitution orders.
Can I discharge debts incurred through fraud?
No. Debts obtained through false pretenses, false representations, or actual fraud are nondischargeable under Section 523(a)(2)(A). The creditor must prove you made a material misrepresentation, knew it was false, intended to deceive, and the creditor justifiably relied on it.
Are government fines and penalties dischargeable?
Most government fines, penalties, and forfeitures are nondischargeable under Section 523(a)(7). This includes traffic tickets, regulatory fines, tax penalties, and criminal restitution. However, some older government debts may be dischargeable if they are purely compensatory rather than punitive.
What is an adversary proceeding for nondischargeability?
An adversary proceeding is a lawsuit within the bankruptcy case where a creditor asks the court to declare a specific debt nondischargeable. The creditor must file a complaint, and both sides present evidence. The creditor bears the burden of proof for most 523(a) exceptions.
Can HOA fees be discharged in bankruptcy?
Pre-petition HOA fees can generally be discharged in Chapter 7. However, post-petition HOA fees that accrue while you still own the property are not dischargeable. In Chapter 13, you must pay HOA arrears through your plan while staying current on ongoing assessments.
Are debts from willful and malicious injury dischargeable?
No. Under Section 523(a)(6), debts arising from willful and malicious injury to another person or their property are nondischargeable. The creditor must prove the debtor intended the injury itself, not just the act that caused the injury.
Do nondischargeability rules differ between Chapter 7 and Chapter 13?
Yes. Chapter 13 has a broader discharge than Chapter 7, meaning fewer debts are nondischargeable. Specifically, debts from willful and malicious injury, property settlements in divorce, and certain government fines may be dischargeable in Chapter 13 but not in Chapter 7.
Can I negotiate nondischargeable debts?
Yes. Even though certain debts survive bankruptcy, you can still negotiate payment terms, reduced balances, or settlements with creditors. Many creditors prefer to settle for less rather than pursue collection against someone who just completed bankruptcy. The IRS offers installment agreements and offers in compromise.
What is the deadline for a creditor to object to discharge?
Creditors must file a complaint objecting to dischargeability within 60 days after the first date set for the 341 meeting of creditors. This deadline can be extended by court order if the creditor files a motion before the deadline expires. Missing this deadline generally means the debt is discharged.