What Types of Debt Can’t Be Discharged in a Chapter 7 Bankruptcy?

In the prior post in which the topic of bankruptcy discharges in Chapter 7 cases was discussed, it was mentioned that some debts cannot be discharged via bankruptcy. This means that debtors will have to pay some, if not all of certain debts. The following kinds of debt are not subject to discharge:

1. Child Support Payments – generally these obligations, because of the public policy that children be properly supported, must be paid. However, in some cases back payments of child support due a state child support collection agency, may be reduced to some extent, particularly if the collecting agency had already imposed late fees or other charges beyond the base child support

2. Fines or Penalties Owed the Government – these may not be discharged however, certain assessments beyond the base penalty or fine, may be slashed. If a debtor received an overpayment for benefits the government paid the debtor before the bankruptcy, such an overpayment may be discharged in Chapter 7 cases.

3. Debts Incurred Due to Driving while Intoxicated – A debtor who operates a vehicle while illegally intoxicated by alcohol or drugs, and kills or injures someone cannot secure a discharge of any debts arising to pay for injuries to others.

4.  Debts Arising From Willful or Malicious Actions  – If a creditor obtains a judgment in a federal or state court that shows the debtor willfully or maliciously caused personal injury or death to others, or injury to the property of another, the debt represented by that judgment cannot be discharged unless the creditor fails to file an action in the bankruptcy case to have the debt declared non-dischargeable.

5. Student Loans – Generally these cannot be discharged unless the debtor can show that payment of such constitutes extreme hardship.

6. Fraudulent Debts – Debts procured by fraud or theft will not be discharged but the burden to so prove non-dischargeability falls on the affected creditor or creditors, and they have to timely file an action in the bankruptcy case to have the debt declared non-dischargeable.

7. Debt Not Listed on the Bankruptcy Schedule – Bankruptcy requires you to list all your creditors on your bankruptcy filings. If a claim is omitted and the creditor does not get notice of the debtor’s pending bankruptcy case, the claim will not be discharged and the creditor may still have the right to recover the debt after the bankruptcy case is concluded.

Before filing a bankruptcy case, it is critical to discuss with a bankruptcy attorney, the nature of one’s debts so as to ensure that a Chapter 7 case can effectively wipe out one’s debts.

In Albuquerque, Giddens & Gatton Law, P.C. has bankruptcy attorneys who offer expert handling of Chapter 7, Chapter 11, Chapter 12 and Chapter 13 bankruptcy cases in New Mexico. The firm represents many debtors and creditors in Albuquerque, Santa Fe, Taos, Raton, Farmington, Gallup, Grants, Roswell, Los Lunas, Placitas, Belen and the rest of New Mexico. Contact Giddens & Gatton Law, P.C. at (505) 633-6298 to set up an appointment with one of its New Mexico bankruptcy lawyers or visit the firm’s website at giddenslaw.com. Giddens & Gatton Law, P.C. is located at 10400 Academy Road N.E., Suite 350 in Albuquerque, New Mexico.