Most debts are eliminated in bankruptcy. The Bankruptcy Code, however, states that the certain individual debts are not dischargeable, and that the creditor does not need to take any Court action to have such a debt declared non-dischargeable. The most common examples of such debts are:
1. Debts for most taxes;
2. Debts for domestic support obligations or those arising out of a divorce decree or separation agreement (except that non-support marital debt can be discharged in Chapter 13);
3. Debts for most student loans;
4. Debts for most fines, penalties, forfeitures, or criminal restitution;
5. Debts for personal injury or death caused by the debtor’s operation of a motor vehicle, vessel, or aircraft while intoxicated;
6. Some debts which were not properly listed on the bankruptcy petition and schedules;
7. Debts for which a Reaffirmation Agreement has been approved;
8. Debts which could have been listed in a prior bankruptcy case;
9. Debts neither listed nor scheduled in time to allow the creditor to file a Proof of Claim;
10. Post-bankruptcy condominium or cooperative owners’ association fees; and
11. Debts incurred to pay non-dischargeable state and/or federal tax debt.
The dischargeability of other types of individual debts may be denied if the creditor files, within sixty days after the first date set for the §341(a) meeting of creditors, an Adversary Complaint to deny the dischargeability of the debt. If such a complaint is timely filed, the Judge will ultimately rule as to whether or not the debt will be discharged. If a complaint is not timely filed, the debt will be considered discharged. Such “potentially non-dischargeable” debts include:
1. Debts incurred by fraud, false pretenses, or materially false statements regarding financial condition;
2. Debts incurred as a result of fraud or defalcation while acting in a fiduciary capacity, or for embezzlement or larceny; and
3. Debts incurred for willful and malicious injury by the debtor to another entity or property of another entity (except that such debts can be discharged in Chapter 13).