Chapter 7 Bankruptcy - Non Dischargeable Debts

Not absolutely all debts are dischargeable in Chapter 7. Some debts will survive the bankruptcy; therefore, they are enforceable. Under the current bankruptcy laws, there are 12 major categories of debts that maybe be determined to be non-dischargeable. They are:

•  Debts you don't list in your bankruptcy petition. [11 USC 523(a) (3)]

•  Student Loans; unless the court finds undue hardship after a trial. [11 USC 523(a) (8)]

•  Most Federal, State, and Local taxes [11 USC 523(a) (1)] and any money borrowed on Credit Cards to pay those taxes.

[11 USC 523(a) (14)]

•  Child Support and Alimony and debts in the nature of Support. [11USC 523(a) (5) and 523(a) (18)]

•  Fines or Restitution (to the court or victim) imposed in Criminal-type proceedings [11 USC 523(a) (7) and 18 USC 361].

•  Fees imposed by Court for the filing of a case, motion, complaint or appeal or for other cost and expenses assessed with such filing.

[11 USC 523(a) (17)]

•  Debts resulting from intoxicated driving. [11 USC 523(a) (9)]

•  Debts you couldn't discharge in a previous bankruptcy that was dismissed due to fraud or misfeasance. [11 USC 523(a) (10)]

To get any of these debts discharged, you have to file a "complaint to determine discharge ability" of a debt (a.k.a. adversary proceeding) with the Bankruptcy Court and then show at trial that your debt isn't covered by the general rules that these debts are not dischargeable. In addition, there are four categories of debt, which will be discharged unless the creditor objects to the discharge ability. These are as follows:

•  Debts incurred on the basis of fraudulent acts. [11 USC 523(a) (2)]

•  Debts from willful and malicious injury to another or another are property [11 USC 523(a) (6)] (i.e. an intentional tort such as coercion, assault, battery, etc).

•  Debts from embezzlement, larceny or breach of trust. [11 USC 523(a) (4)]

•  Debts arising from martial settlement agreement or divorce decree. [11 USC 523(a) (15)]

If you have debt, which applies to one of the four categories, your best approach is to list the debt in the petition and do nothing further. Hopefully, the creditor does not come forward and the debt will be automatically discharged with your other debts. If, however, the creditor does come forward and object and the court agrees with their position, you have to repay this debt. However, at least your other debts should be discharged thereby making it much more affordable to pay this non-dischargeable debt.