Debts That Chapter 7 Bankruptcy Cannot Discharge

Chapter 7 bankruptcy eliminates most unsecured debts, giving you a genuine fresh start. Credit card balances, medical bills, personal loans, and many other obligations can be wiped clean in a matter of months. But the law carves out certain categories of debt that survive the bankruptcy process, and knowing about these exceptions before you file is important for setting realistic expectations.

At our Pittsburgh-area practice, we make sure every client understands exactly which of their debts will be discharged and which will remain. Here is a breakdown of the most common types of non-dischargeable debts.

Domestic Support Obligations

Child support and alimony obligations cannot be discharged in any type of bankruptcy. This applies to current payments, back payments, and any interest or penalties that have accumulated on past-due support. The law treats these as priority debts because they directly affect the well-being of children and former spouses.

If you are behind on child support or alimony, bankruptcy will not eliminate that arrearage. However, by wiping out other debts, Chapter 7 can free up income that makes it easier to stay current on your support obligations going forward. Many of our clients find that eliminating credit card debt and medical bills gives them the breathing room they need to meet their family obligations consistently.

Most Student Loans

Student loans are among the most difficult debts to discharge in bankruptcy. Under current law, student loans are generally non-dischargeable unless you can demonstrate "undue hardship." Courts have historically applied this standard very strictly, requiring proof that you cannot maintain a minimal standard of living while repaying the loans, that the hardship is likely to persist for a significant portion of the repayment period, and that you have made good-faith efforts to repay.

That said, the legal landscape around student loan dischargeability has been shifting in recent years. The Department of Justice issued new guidelines that make it easier for bankruptcy filers to seek student loan discharge. While the standard is still demanding, it is no longer the near-impossibility it once was. If student loans are a major part of your debt picture, it is worth discussing the current state of the law with your attorney.

Certain Tax Debts

Tax debts have a complicated relationship with bankruptcy. Some can be discharged, and some cannot. Generally, income tax debts may be dischargeable if they meet all of the following conditions: the tax return was due at least three years ago, the return was actually filed at least two years ago, the tax was assessed at least 240 days ago, and the return was not fraudulent. You also cannot have willfully attempted to evade the tax.

Payroll taxes, trust fund taxes, and taxes for which no return was ever filed are typically non-dischargeable. If you owe back taxes to the IRS or the state of Pennsylvania, we can analyze each tax year individually to determine which debts might be eligible for discharge. Visit our tax debt page for more information.

Debts From Fraud or Intentional Wrongdoing

If you incurred a debt through fraud, false pretenses, or a false written statement about your financial condition, that debt may be non-dischargeable. Common examples include:

Credit card charges made with no intent to repay. If you ran up credit card charges shortly before filing for bankruptcy and had no realistic expectation of being able to pay them back, the credit card company can object to the discharge of those specific charges. Large cash advances or luxury purchases within 90 days of filing receive extra scrutiny.

Debts obtained through misrepresentation. If you lied on a loan application about your income, assets, or employment to get approved, the lender can argue that the resulting debt should not be dischargeable.

Embezzlement, larceny, and breach of fiduciary duty. Debts arising from these types of conduct survive bankruptcy.

It is worth noting that the creditor bears the burden of proving fraud. They have to file a specific objection with the bankruptcy court and demonstrate the elements of fraud. The debt is not automatically excluded. If no creditor objects, the debt will be discharged like any other.

Other Non-Dischargeable Debts

DUI-related debts. If you caused a death or personal injury while driving under the influence of alcohol or drugs, any resulting judgment or settlement is non-dischargeable.

Criminal fines and restitution. Court-ordered fines, penalties, and restitution in criminal cases survive bankruptcy. Parking tickets and traffic citations fall into this category as well.

Homeowner association dues. HOA fees that come due after your bankruptcy filing date are not discharged. Pre-petition HOA fees may be dischargeable, but post-petition obligations remain your responsibility if you continue to own the property.

Debts from a prior bankruptcy. If you had a previous bankruptcy case where certain debts were denied discharge due to fraud or failure to cooperate, those same debts cannot be discharged in a later case.

Planning Around Non-Dischargeable Debts

Even when some debts survive bankruptcy, filing can still be a smart financial move. Eliminating dischargeable debts frees up income to address the obligations that remain. A client who owes $40,000 in credit card debt and $15,000 in non-dischargeable tax debt is in a much better position after Chapter 7 wipes out the credit cards, even though the tax debt remains.

In some situations, Chapter 13 bankruptcy may be a better fit because it allows you to pay certain priority debts through a structured repayment plan. If you have significant non-dischargeable debts, comparing both chapters is an important step in the planning process.

Understanding which debts can and cannot be discharged is something we address during every initial consultation. If you would like to know how bankruptcy would apply to your specific debts, check out our bankruptcy overview or schedule a free meeting with our team.