Dischargeable vs. Non-Dischargeable Debts in Bankruptcy

Bankruptcy erases some debts completely and leaves others fully intact, and the difference between dischargeable and non-dischargeable debts in bankruptcy usually comes down to what kind of debt it is, when you took it on, and occasionally whether a creditor pushes back in court. Credit cards, medical bills, and most personal loans typically go away. Child support, criminal fines, recent tax debts, DUI injury debts, and most student loans stay. A middle group depends on timing rules, creditor challenges, or which chapter you file under.

Debts a Discharge Wipes Out

Most filers turn to Chapter 7 or Chapter 13 to clear general unsecured debts — obligations with no collateral behind them. Credit card balances are dischargeable regardless of amount. Medical bills are treated the same way. Personal loans from banks or online lenders, past-due cell phone bills, old utility balances, gym memberships in collections, and similar consumer debts all fall inside the discharge.

Once the court enters your discharge order, creditors holding those debts are permanently barred from calling you, sending letters, or suing to collect. The order works as a federal court injunction, and violating it can expose a creditor to contempt sanctions.¹ Any prior judgment against you for a discharged debt becomes unenforceable as a personal liability.

Government benefit overpayments, such as Social Security payments you received but weren’t entitled to, can also be discharged in many cases. The bankruptcy court, not the agency, decides whether the overpayment qualifies. The exception is fraud: if the agency can show you intentionally misled them, the debt survives.

Debts That Survive Every Bankruptcy

Some obligations are protected from discharge as a matter of public policy. Financial hardship does not eliminate them, and they apply in both Chapter 7 and Chapter 13.

Child support and alimony. Domestic support obligations are the most firmly protected category in the bankruptcy code. Any debt in the nature of support owed to a spouse, former spouse, or child cannot be discharged, whether it comes from a court order or a separation agreement.² In a Chapter 13 plan, these obligations must be paid in full before other unsecured creditors receive anything.

Criminal fines and restitution. Fines imposed as part of a criminal sentence and restitution orders requiring you to compensate victims are non-dischargeable.² Federal restitution orders under Title 18 are separately carved out.

Drunk driving injury debts. If you injured or killed someone while operating a vehicle, boat, or aircraft while legally intoxicated, the resulting debt is non-dischargeable in both chapters.² This covers damages from civil lawsuits and consent decrees alike.

Divorce property settlements. Debts owed to a spouse or child from a divorce or separation that aren’t support obligations — such as an agreement to pay off a joint credit card or to compensate your ex for their share of an asset — are non-dischargeable in Chapter 7.² Chapter 13 treats these differently, as explained below.

Tax Debts and Their Timing Rules

Income tax debt sits in an unusual middle zone: sometimes dischargeable, but only if it clears a narrow set of timing requirements. All three of these rules must be satisfied:

Three-year rule: The tax return was originally due (including extensions) at least three years before you filed your bankruptcy petition.
Two-year rule: You actually filed the return at least two years before the petition date.
240-day rule: The IRS or state tax authority assessed the tax at least 240 days before you filed.

Miss any one of these windows and the entire tax balance remains collectible.³ Certain events, such as prior bankruptcy filings or offers in compromise, can pause the 240-day clock. Getting these dates wrong is one of the most common and costly errors in bankruptcy planning.

Some tax debts never qualify no matter how old they are. Payroll taxes that a business withheld from employees’ wages but failed to remit to the IRS stay with the responsible person permanently.⁴ Tax penalties tied to fraud or deliberate evasion also survive.

Debts a Creditor Can Challenge

A separate group is dischargeable by default but becomes non-dischargeable if a creditor objects and wins. The creditor has to file an adversary proceeding, which is essentially a mini-lawsuit inside your bankruptcy case, and prove the debt falls into a protected category. If the creditor doesn’t file, the debt is discharged like any other.

Fraud and misrepresentation. A creditor can block discharge of a debt you obtained through fraud, a false written statement about your finances, or outright deception.² The classic example is lying on a loan application about your income. The creditor must show a material misrepresentation, knowledge it was false, and intent to deceive.

Willful and malicious injury. Debts from intentional harm to a person or their property can be declared non-dischargeable if the creditor proves the injury was both deliberate and malicious.² Accidental harm, even reckless behavior, typically doesn’t meet this bar.

Luxury Purchases and Cash Advances Right Before Filing

The bankruptcy code presumes fraud for certain last-minute spending. If you charged more than $900 to a single creditor for luxury goods or services within 90 days of filing, that debt is presumed non-dischargeable. Cash advances totaling more than $1,250 from a credit line within 70 days of filing get the same treatment.⁵ These thresholds were last adjusted on April 1, 2025.

“Presumed non-dischargeable” means the burden shifts to you to prove the purchases were legitimate. Groceries and car repairs aren’t luxuries; a designer handbag or vacation package in the weeks before filing will draw immediate scrutiny. If you’re considering bankruptcy, stop using credit cards well before you file.

Student Loans and the Undue Hardship Standard

Student loans are presumed non-dischargeable, but they aren’t absolutely immune. To discharge student loan debt, you must file a separate adversary proceeding within your bankruptcy case and demonstrate that repayment would impose an undue hardship on you and your dependents.⁶

Courts have historically applied a demanding multi-factor test requiring a showing that you can’t maintain a minimal standard of living while repaying, that your financial situation is likely to persist for most of the repayment period, and that you’ve made good-faith efforts to repay. The success rate was so low that many borrowers and their attorneys didn’t bother trying.

That has begun to change. The Department of Justice issued guidance directing U.S. Trustee offices to take a more practical, case-by-case approach rather than reflexively opposing every discharge request.⁷ The Department of Education updated its instructions to federal loan holders in the same direction. Neither change rewrites the statute, but both signal a less hostile process for borrowers in genuine financial distress. If student loans are your primary burden, this route is worth exploring with an attorney.

Secured Debts: The Lien Survives

A discharge eliminates your personal obligation to pay a debt. It does not erase a creditor’s lien on your property. Two different things, and confusing them is where filers get burned. If you discharge a car loan, the lender can no longer sue you for the balance, but they can still repossess the vehicle if you stop paying. Discharge a mortgage and the bank can still foreclose on the house.⁸

Every secured debt forces a choice: surrender the property and walk away, or keep making payments to hold onto it. If you want to keep the collateral and remain personally liable so the lender continues normal servicing, you can sign a reaffirmation agreement. Reaffirmation is voluntary — no creditor can force you into one — and it must be completed before the court enters your discharge.¹ Reaffirming puts you back on the hook for the full debt, so if you later default, the creditor can repossess and sue for any deficiency, exactly as if the bankruptcy never happened. Think carefully before reaffirming, especially on a depreciating asset like a car that may already be worth less than the loan balance.

What Happens to Co-Signers

Your discharge only covers you. If someone co-signed a loan or is jointly liable on a credit card, your bankruptcy does nothing to shield them from collection. In a Chapter 7 case, creditors are free to pursue the co-signer for the full balance the moment you file. There is no automatic stay protecting third parties in Chapter 7.

Chapter 13 works differently. A co-debtor stay kicks in automatically when you file, temporarily preventing creditors from going after anyone who co-signed a consumer debt with you.⁹ The protection lasts as long as you remain in your Chapter 13 plan and covers debts incurred for personal, family, or household purposes. A creditor can ask the court to lift the stay in specific situations, such as when your plan doesn’t propose to pay that particular debt, or when the co-signer was actually the person who received the benefit of the loan. If your case is dismissed, converted, or closed, the protection ends and the creditor can pursue the co-signer for whatever balance remains.

Traps That Catch Filers Off Guard

Post-Filing HOA and Condo Fees

Homeowner association and condominium fees that come due after your bankruptcy filing date are non-dischargeable for as long as you hold any ownership interest in the property.² Pre-filing HOA arrears can be discharged like any other unsecured debt, but everything assessed afterward sticks. The trap is timing. If you surrender a home in bankruptcy but the mortgage lender takes months or years to complete the foreclosure, you remain the legal owner during that delay, and the HOA fees keep accruing against you the whole time.

Debts You Forget to List

Bankruptcy requires you to schedule every debt you owe. If you leave a creditor off your schedules and that creditor didn’t learn about your case in time to participate, the debt may survive the discharge.² For ordinary unsecured debts in no-asset Chapter 7 cases (where creditors wouldn’t have received anything anyway), the omission is sometimes forgivable. For debts involving fraud or intentional harm, failing to list them is nearly always fatal to the discharge. List every creditor when you prepare your petition, even debts you think are too small to matter or ones you intend to keep paying.

What Chapter 13 Can Discharge That Chapter 7 Cannot

Chapter 13 requires you to complete a three-to-five-year repayment plan, and the reward for finishing is a broader discharge. Several categories that survive Chapter 7 can be eliminated at the end of a completed Chapter 13 plan:¹⁰

Willful property damage. Debts from intentionally damaging someone’s property are non-dischargeable in Chapter 7 but can be discharged in Chapter 13. Debts from intentional personal injury or death survive both chapters.
Divorce property settlements. Obligations from a divorce property division that aren’t support payments can be discharged through a completed Chapter 13 plan, even though they’re protected in Chapter 7.
Non-criminal government fines. Fines and penalties owed to a government agency that aren’t part of a criminal sentence, such as regulatory penalties or civil contempt fines, are dischargeable in Chapter 13 but not in Chapter 7.
Debts denied discharge in a prior bankruptcy. If a previous Chapter 7 case denied your discharge entirely, a later Chapter 13 filing can still discharge those debts once you complete the plan.

This broader relief is sometimes called the Chapter 13 “superdischarge,” and it’s a real strategic reason to choose a repayment plan over liquidation, especially if divorce-related obligations or government penalties make up a significant share of what you owe. Child support, alimony, student loans, criminal restitution, DUI injury debts, and fraud-based debts remain non-dischargeable in both chapters. No form of consumer bankruptcy eliminates those.

1
Office of the Law Revision Counsel. 11 USC 524 – Effect of Discharge
2
Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge
3
Internal Revenue Service. Publication 908 – Bankruptcy Tax Guide
4
Internal Revenue Service. Declaring Bankruptcy
5
Federal Register. Adjustment of Certain Dollar Amounts Applicable to Bankruptcy Cases
6
Federal Student Aid. Undue Hardship Discharge of Title IV Loans in Bankruptcy Adversary Proceedings
7
U.S. Department of Justice. Student Loan Guidance
8
United States Courts. Discharge in Bankruptcy – Bankruptcy Basics
9
Office of the Law Revision Counsel. 11 USC 1301 – Stay of Action Against Codebtor
10
Office of the Law Revision Counsel. 11 USC 1328 – Discharge