To receive a discharge of debts means that a federal court declares that a debt is no longer enforceable. The creditor has no legal authority to collect the debt once it has been discharged. In that way, Bankruptcy law allows debtors to get a fresh start. However, there are some limitations as to which debts can be discharged. Certain public policy considerations are weighed when determining which debts will be discharged. For example, court ordered child support is not dischargeable in bankruptcy. The underlying public policy there is that children are entitled to be taken care of by their parents. The appropriate venue to change court ordered child support is in state run family law courts, not federal bankruptcy court.
Other than child support and spousal maintenance payments, other non-dischargeable debts include:
1. Fine, penalties, and restitution orders imposed by government.
2. Many tax debts are not dischargeable. This is a complicated issue that should be assessed by an experienced bankruptcy attorney.
3. DUI fines and penalties, as well as claims for personal injuries arising from intoxicated driving.
4. Debts that were non-dischargeable in a previous bankruptcy filing.
5. Most student loans are not dischargeable.
6. Debts incurred as a result of fraud, theft, embezzlement, larceny, or the breach of a fiduciary duty.
7. Debts arising from the willful or malicious injury cased by the debtor.
8. Debts incurred in the three months prior to filing if they include luxury goods or cash advances.
The rules that determine which debts are dischargeable are different for a Chapter 7 than a Chapter 13. It is important to consult with an experienced bankruptcy attorney to determine which debts may not be dichargeable in your case so that you can make an informed choice about which Chapter to file.