Debts You Can't Get Rid of By Filing Bankruptcy

The Exceptions of Debt Survival

Consumer Bankruptcy will not discharge (get rid of) all of your debts. Some debts survive the bankruptcy process and are as valid and collectable as they were before a bankruptcy is filed. Under the bankruptcy laws, 12 major categories of debts may turn out to be “nondischargeable” unless the debts fit into a narrow exception to the rule.

These debts are:

• Debts you don't list in your bankruptcy filings
• Student loans unless repayment would cause you undue hardship.
• Most federal, state and local taxes and any money borrowed on a credit card to pay those taxes.
• Child support and alimony and debts in the nature of support.
• Fines or restitution (to the court or victim) imposed in a criminal-type proceeding.
• Fees imposed by a court for the filing of a case, motion, complaint or appeal or for other costs and expenses assessed with such filing.
• Debts resulting from intoxicated driving.
• Debts you couldn't discharge in a previous bankruptcy that were dismissed due to fraud or misfeasance.

To get any of these debts discharged, you have to file a "Complaint to Determine Dischargeability" of the Debt with the bankruptcy court and then show, in court, that your debt isn't covered by the general rules which say that these debts are not dischargeable. This is called an “adversary proceeding.”

In addition, there are four categories of debts which will be discharged unless the creditor objects to dischargeablity. These are:

• Debts incurred on the basis of fraudulent acts.
• Debts from willful and malicious injury to another or another's property.
• Debts from embezzlement, larceny or breach of trust.
• Debts arising from a marital settlement agreement or divorce decree.

On the bright side, filing for bankruptcy will remove most of the burdens of debt from you. You will then be able to more readily pay any of the debts listed above.