What Debts Don't Get Discharged in Chapter 7?

Recent income taxes are generally nondischargeable in Chapter 7 bankruptcy, meaning you typically cannot wipe them out if they are from the last three tax years. The core test for a 'recent' tax debt hinges on the return's due date. To be potentially discharged, the tax return must have been initially due at least three years before you filed for bankruptcy, and you must have actually filed that return at least two years ago. If you filed for an extension, the three-year clock often starts from the extended due date, not April 15. Additionally, the IRS must have assessed the tax at least 240 days before your bankruptcy filing. Because these timing rules are strict and the government's right to collect is powerful, always verify your specific filing dates and assessment history with a bankruptcy attorney before assuming a tax debt will go away.

In Chapter 7 bankruptcy, student loans are generally nondischargeable, meaning you still owe them after your case is closed. To wipe out this debt, you must prove that repaying it would cause an 'undue hardship,' which is a much higher legal bar than simply showing you are struggling financially.

The undue hardship exception requires filing a separate lawsuit within your bankruptcy case, called an adversary proceeding. Most courts use a strict test that essentially requires you to prove you cannot maintain a minimal standard of living now, that this situation is likely to persist for a significant portion of the repayment period, and that you have made a good-faith effort to repay the loans. Because success is rare and the process adds legal costs, many filers do not attempt this unless their circumstances are extreme and well-documented.

Debts connected to fraud are generally nondischargeable in Chapter 7 bankruptcy, meaning a creditor can ask the court to exclude them from your fresh start. A debt doesn't automatically fall into this category just because the lender says so. The creditor must file a lawsuit, called an adversary proceeding, and prove that you obtained the money or property through fraudulent means before the court will rule the balance permanently owed.

Common categories of fraud that can make a debt stick include:

• False financial statements: Making a materially inaccurate written statement about your financial condition to secure a loan or credit, often within a specific timeframe before filing.
• Fraud or defalcation in a fiduciary capacity: Misusing money while acting as someone else's trustee or responsible party, such as through embezzlement.
• Larceny or willful and malicious injury: Debts from intentionally taking property or causing deliberate harm to another person or their property.

If a creditor does not formally challenge the discharge of a debt before the court's deadline, the debt is typically wiped out even if there might have been a fraud claim. The burden of proof is on the creditor, not you, but an adverse ruling in this process leaves you fully responsible for that specific debt after your case closes.

Child support and alimony are completely nondischargeable in Chapter 7 bankruptcy, meaning you will still owe every penny after your case closes. Congress gave domestic support obligations a special, protected status, so the bankruptcy court cannot wipe them out, and the automatic stay won't stop most enforcement actions against you.

The following types of domestic support obligations are generally nondischargeable:

• Current and past-due child support
• Current and past-due alimony or spousal maintenance
• Interest that accrues on unpaid support balances
• Attorney fees awarded to the other parent in a support dispute
• Any debt that functions as support, even if labeled differently in a divorce decree

Property settlement debts from a divorce, on the other hand, can sometimes be discharged, but only if they aren't truly support obligations. Because this line gets blurry fast, review your divorce decree with your attorney before assuming any family-court debt will go away.

Court fines and restitution are generally nondischargeable in Chapter 7 bankruptcy, meaning you still owe them after your case closes. The law carves out an exception for debts owed to a governmental unit that are not compensation for actual pecuniary loss, but criminal penalties nearly always fall outside that exception. In practice, if a judge ordered you to pay money as punishment or to make a victim whole, bankruptcy will not wipe it out.

Common nondischargeable court-ordered debts include:

• Criminal fines imposed after a conviction
• Restitution ordered as part of a criminal sentence
• Traffic tickets and parking penalties
• Court costs tied to a criminal case

Civil penalties, however, may be treated differently. A fine from a regulatory agency that is purely punitive and not tied to a criminal conviction can sometimes be discharged if it does not compensate the government for an actual loss. The line is fact-specific, so if a civil penalty is a large part of your filing, review it with your attorney before assuming it will vanish.

When you file Chapter 7 bankruptcy, your personal liability on a co-signed debt is generally discharged, but that discharge does not protect your co-signer. The bankruptcy court's order only wipes out your legal obligation to pay. The lender retains the full right to demand payment from the co-signer, who remains 100% liable for the remaining balance as if your bankruptcy never happened.

Because the co-signer's obligation is a separate contract, the creditor can take immediate collection action against them once your automatic stay no longer protects you. This means the co-signer may face collection calls, a lawsuit, or damage to their credit if the debt goes unpaid. If you want to protect a friend or family member from that burden, you must either reaffirm the debt during your case or continue making voluntary payments after your discharge.

When you file Chapter 7 bankruptcy and decide to keep your home, the obligation to pay future HOA dues does not go away. While the personal liability for pre-petition dues is generally discharged, the lien tied to your property often secures that old debt, and all new dues after filing remain your responsibility.

Here is how to think about the separation:

1. Determine whether you keep the property. This rule only applies if you stay in the home. If you surrender the house in the bankruptcy, you are generally off the hook for future personal liability.
2. Identify pre- vs. post-petition dues. Charges that came due before you filed are treated as an unsecured debt and are discharged. Fees that come due after your filing date are nondischargeable and must be paid as they accrue.
3. Understand the effect on discharge. Even though your personal obligation to pay old dues is wiped out, the HOA's lien against the property typically survives. This means if you want to sell the home later, those old unpaid fees, plus any late charges, generally must be paid at closing to clear the title.

Therefore, keeping the home in a Chapter 7 bankruptcy means choosing to stay current on future dues and accepting that the old debt remains attached to the property itself, even if you can't be sued personally for it.

When you properly list a debt in your Chapter 7 bankruptcy, it is generally discharged. The bankruptcy court notifies your creditors, and even if a specific creditor does not actually see the notice, the debt still goes away. The legal system treats the debt as wiped clean because you followed the required procedure.

A debt you accidentally forget to list, however, often remains your responsibility. The debt may be nondischargeable unless the creditor had actual knowledge of your bankruptcy filing in time to participate. If the case is a no-asset Chapter 7, meaning there was no money distributed to creditors, some courts may still discharge the forgotten debt. But if funds were paid out, an omitted creditor can argue they were cheated out of their fair share and may pursue you even years later. If you realize a debt was missed, inform your bankruptcy attorney immediately so they can determine if amending your paperwork is allowed and prudent.

Luxury charges and cash advances taken shortly before filing Chapter 7 bankruptcy are generally presumed fraudulent and may not be discharged. The law assumes you ran up these debts knowing you would wipe them out in bankruptcy, so the court can rule them nondischargeable.

Creditors don't need to prove your intent, the timing and amounts create the presumption automatically:

• Luxury goods or services totaling more than $725 owed to a single creditor and bought within 90 days before filing are presumed nondischargeable. Luxury goods do not include items reasonably necessary for your support or maintenance.
• Cash advances exceeding $1,050 taken within 70 days before filing carry the same presumption.

You can rebut the presumption, but it requires showing you genuinely intended to repay and did not plan the bankruptcy. Standard examples include using cash advances to pay essential living costs during a sudden job loss, or buying what later looks like a luxury item for a legitimate work requirement. The key is proving the circumstances were not a last-minute spending spree. If you made large discretionary purchases or took cash advances in the months leading up to your case, expect the creditor to challenge dischargeability.

DUI-related claims for personal injury or property damage are generally nondischargeable in Chapter 7 bankruptcy when the accident involved driving under the influence. This means the civil liability you face from an injured party won't be wiped out by your bankruptcy discharge, even if the debt feels overwhelming.

These claims cover a specific type of harm. For example, if you cause a car accident while intoxicated and another driver racks up medical bills or their vehicle is totaled, that restitution or civil judgment debt often cannot be erased. This exception exists because courts typically view the decision to drive drunk as a reckless act that leads to willful and malicious injury, even if you didn't intend to hit anyone. A standard negligence claim from a simple fender bender is usually dischargeable, but the addition of intoxication fundamentally changes the legal outcome.

It's a harsh rule with a practical takeaway. If you're filing Chapter 7 bankruptcy after a DUI accident, expect the financial liability to the victims to survive your case. The court will look at the specific facts, but the burden to prove the debt is dischargeable will be on you, and it's an uphill battle.