What Debts Can Be Discharged in Bankruptcy and What Can’t

Bankruptcy discharges most unsecured consumer debts, including credit card balances, medical bills, personal loans, and old utility arrears, but federal law protects several categories from being wiped out: child support and alimony, most recent tax debts, student loans absent proof of undue hardship, debts from fraud or intentional harm, criminal fines and restitution, and injury claims tied to drunk driving. Knowing what debts can be discharged in bankruptcy — and which ones follow you out of the case — matters more than almost any other decision point before filing. Once the court enters a discharge, it acts as a permanent injunction barring creditors from calling, suing, or garnishing wages to collect on any debt the order eliminated.¹

Debts Bankruptcy Wipes Out

In a Chapter 7 case, the court discharges every debt that existed before your filing date unless a specific exception applies.² For most filers, that means the bulk of their unsecured consumer debt disappears entirely.

Credit card balances, including accumulated interest and late fees.
Medical bills from hospital stays, emergency care, surgeries, and ongoing treatment.
Personal loans from banks, credit unions, or online lenders.
Past-due utility balances. A utility company cannot cut off service solely because you filed, though it can require a deposit for future service within 20 days of the filing.³
Amounts owed under broken leases or service contracts that predate the filing.

None of these creditors hold a lien on your property, so once the discharge enters, the legal obligation simply ends. They cannot repossess anything because there was nothing pledged to begin with.

Debts That Survive Bankruptcy

Federal law carves out specific debts from discharge, and they will follow you out of the case regardless of which chapter you file. The main categories:

Child support and alimony (called domestic support obligations).
Most recent income tax debts.
Student loans, unless you prove undue hardship.
Debts obtained through fraud or false pretenses.
Recent luxury purchases and large cash advances taken close to filing.
Debts from intentional harm to a person or property, including embezzlement and theft.
Government fines, penalties, and criminal restitution.
Injury or death claims from operating a vehicle, vessel, or aircraft while intoxicated.
Homeowners association and condo fees that come due after you file, so long as you still hold an ownership interest in the property.

Domestic Support Obligations

Child support and alimony cannot be discharged under any chapter.⁴ You will owe the full amount after the case closes, including any arrears that existed before filing. Wage levies, tax refund seizures, and contempt-of-court proceedings for missed support payments continue during and after bankruptcy. What the case can do is free up cash flow by eliminating other debts so you can keep support current.

Fraud, Luxury Purchases, and Cash Advances

If a creditor proves you used false pretenses or fraud to obtain money, goods, or services, that debt stays.⁴ Two specific presumptions apply to spending shortly before a filing:

Credit card charges for luxury goods or services totaling more than $900 from a single creditor within 90 days of filing are presumed fraudulent.
Cash advances totaling more than $1,250 from a single creditor within 70 days of filing are presumed fraudulent.

Those thresholds took effect April 1, 2025, and apply through March 31, 2028. The presumption is rebuttable, meaning you can present evidence that you genuinely intended to repay, but the burden shifts to you once the creditor establishes the timing and amount. Debts arising from embezzlement, theft, or intentional harm to another person or their property are also nondischargeable when the creditor objects and proves intent.

Government Fines, Restitution, and DUI Debts

Fines, penalties, and forfeitures payable to a government entity are generally nondischargeable when intended as punishment rather than compensation.⁴ Criminal fines, traffic tickets, regulatory penalties, and court-ordered restitution all survive.

Debts stemming from death or personal injury you caused while operating a motor vehicle, vessel, or aircraft while intoxicated are categorically nondischargeable, and this applies to both compensatory and punitive damages.

HOA and Condo Fees After Filing

HOA and condo fees that were past due when you filed are dischargeable. Fees or assessments that come due after the filing date are not, as long as you or the trustee still hold an ownership interest in the property.⁵ If you intend to surrender the home, these charges can build up until the title actually transfers.

Secured Debts: The Mortgage and Car Loan Question

A discharge eliminates your personal liability for a debt, but it does not remove a lien attached to your property.⁶ Your mortgage or car lender can still foreclose or repossess if you stop paying. What changes is that after the collateral is gone, the lender cannot sue you for any remaining balance.

In a Chapter 7 case, you generally have three options for secured property:

Surrender the property. You return the car or let the home go to foreclosure, and any remaining debt is discharged.
Reaffirm the debt. You sign a new agreement keeping you personally liable in exchange for keeping the property. The agreement must be filed within 60 days after the first date set for the meeting of creditors, and you have a 60-day window after filing it to cancel.
Redeem the property. For tangible personal property used for personal or household purposes, you can pay the lender the current value of the collateral in a lump sum, which may be less than the loan balance.⁷

Think carefully before reaffirming. If you reaffirm a car loan and later fall behind, the lender can repossess and pursue you for any deficiency, which is exactly the outcome bankruptcy is meant to prevent. If you filed without an attorney, a judge must hold a hearing to determine whether the reaffirmation is in your best interest before approving it.

When Tax Debts Can Be Discharged

Income tax debts can sometimes be discharged, but only if every one of these conditions is met:⁸

The return was originally due, including extensions, at least three years before you filed for bankruptcy.
You actually filed the return at least two years before your bankruptcy filing date.⁵
The IRS or state tax authority assessed the tax at least 240 days before you filed.
You did not file a fraudulent return or willfully try to evade the tax.

Miss any one and the tax survives. Certain events pause the clock: a prior bankruptcy filing adds 90 days to both the three-year and 240-day deadlines, and a pending offer in compromise extends the 240-day window by 30 days.

Payroll taxes an employer withheld from wages but never sent to the IRS are never dischargeable, and neither are sales taxes collected from customers but not remitted. These are trust-fund taxes, held on behalf of others, and bankruptcy law does not erase them.

Student Loans and the Undue Hardship Standard

Federal and private student loans are not automatically discharged. To eliminate them, you must file a separate lawsuit within your bankruptcy case — an adversary proceeding — and prove that repayment would impose an “undue hardship” on you and your dependents.⁴

Nine federal circuits apply the Brunner test, which requires you to show three things:

You cannot maintain a minimal standard of living while making payments based on current income and expenses.
Your financial situation is likely to persist for a significant portion of the repayment period, often due to a permanent disability or long-term inability to earn adequate income.
You have made a good-faith effort to repay, such as participating in income-driven repayment plans or seeking deferment when eligible.

The Eighth Circuit and some courts in the First Circuit weigh the totality of the debtor’s financial circumstances instead of requiring strict proof of each prong.

In November 2022, the Department of Justice and the Department of Education launched a streamlined attestation process for federal student loans.⁹ Borrowers complete a form tracking the standard hardship factors, and if the attestation clearly demonstrates undue hardship, a DOJ attorney can agree to the facts and recommend discharge without contested litigation.¹⁰ The adversary proceeding still has to be filed and the court retains the final decision.

Chapter 7 vs. Chapter 13: Where the Answer Changes

Chapter 7 eliminates debts quickly, usually within a few months, but the list of exceptions is long. Chapter 13 requires you to complete a three-to-five-year repayment plan, and the completion discharge under 11 U.S.C. § 1328(a) covers a few debts Chapter 7 cannot touch.¹¹ The differences that matter most:

Property settlement debts from divorce, meaning amounts you agreed to pay a former spouse as part of dividing assets, are nondischargeable in Chapter 7 but can be discharged after completing a Chapter 13 plan.
Chapter 13’s exception for intentional harm is narrower. Only debts for personal injury or death from willful and malicious conduct survive; debts for intentional damage to property alone may be dischargeable.
Some non-tax government fines and penalties that survive Chapter 7 can be addressed through a Chapter 13 plan.

Both chapters leave the same core debts untouched: domestic support obligations, most tax debts, student loans absent hardship, debts from fraud, and DUI-related injury claims. The broader Chapter 13 discharge is sometimes called a “super discharge,” though Congress significantly narrowed it in 2005.

When the Court Denies Discharge Entirely

There is a difference between debts excepted from discharge and a total denial of discharge. The court will refuse to grant any discharge at all if you engaged in serious misconduct. Grounds under 11 U.S.C. § 727(a) include:²

Hiding, destroying, or transferring property within one year before filing, or after filing, with intent to defraud creditors.
Concealing, destroying, or falsifying financial records without justification.
Making a false statement or presenting a false claim under oath in the case.
Failing to satisfactorily explain missing property or a shortfall in assets.
Disobeying a lawful court order or refusing to testify after being granted immunity.

If the court denies discharge, you leave the case still owing everything you owed going in. The outcome is rare, but it is the reason full honesty and cooperation with the trustee matters throughout the process.

1
Office of the Law Revision Counsel. 11 U.S.C. 524 – Effect of Discharge
2
Office of the Law Revision Counsel. 11 U.S.C. 727 – Discharge
3
Office of the Law Revision Counsel. 11 U.S.C. 366 – Utility Service
4
Office of the Law Revision Counsel. 11 U.S.C. 523 – Exceptions to Discharge
5
Office of the Law Revision Counsel. 11 U.S. Code 523 – Exceptions to Discharge
6
Office of the Law Revision Counsel. 11 U.S. Code 506 – Determination of Secured Status
7
Office of the Law Revision Counsel. 11 U.S. Code 722 – Redemption
8
Office of the Law Revision Counsel. 11 U.S.C. 507 – Priorities
9
U.S. Department of Justice. Student Loan Discharge Guidance – Guidance Text
10
U.S. Department of Justice. Student Loan Guidance
11
Office of the Law Revision Counsel. 11 U.S. Code 1328 – Discharge