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  Non-Dischargeable Debts in Chapter 7

     In Chapter 7, some debts do not get wiped out by the discharge. These are debts which, in the opinion of Congress, should not be wiped out, because allowing discharge would be against public policy. Congress is continually adding to this list. They are found in Bankruptcy Code Section 523(a).

Debts Not Wiped Out Requiring No Creditor Action

     The following debts are automatically non-dischargeable and require no creditor action.

Requiring No Creditor Action
Certain tax liabilities, including recent income taxes,"trust fund" taxes where funds were withheld from employees' paychecks and not turned over to the tax entity

Debts omitted from the debtor's schedules

Domestic support obligations

Fines, penalties and forfeitures payable to or for the benefit of a governmental unit which are not compensation for actual pecuniary loss, including state and federal criminal restitution orders

Student loans (unless the debtor can show "undue hardship")

Liability for personal injury or wrongful death arising from a debtor's operation of a motor vehicle or boat or aircraft while under the influence of alcohol or drugs

Claims from a prior case wherein debtor was denied a discharge

Claims of fraud or defalcation committed by the debtor in connection with a depository institution or credit union

Obligations to a spouse or child under a marital dissolution or separation decree

Claims for post-petition homeowners' association (HOA) dues incurred post-petition, for as long as the debtor or trustee has a legal or equitable, including possessory, interest in the unit

Amounts owed to a pension or profit-sharing plan

Liability for violations of state or federal securities laws or regulations, or common law fraud, deceit, or manipulation in connection with the purchase or sale of a security



Debts Not Wiped Out But Requiring Creditor Action

     Under Code Section 523(c), there are some debts which require the creditor to file a lawsuit to determine dischargeability of debt (usually within 90 days after the bankruptcy filing) and then prevail against the debtor in that suit. These include:

Requiring Creditor Action
Section 523(a)(2), a debt for money or property obtained by false pretenses or fraud, or use of a materially false financial statement

Section 523(a) (4), a debt for fraud or defalcation while acting in a fiduciary capacity, embezzlement or larceny

Section 523(a)(6), a debt for willful and malicious injury to the person or property of another


Written by Henry Rendler

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