Will a court discharge all my debts in bankruptcy?

The discharge of your debts in bankruptcy is an important part of relieving you of your debt burden and enabling you to rebuild your finances. When a judge discharges your debt, it means you are no longer responsible for paying it off. However, you may have some debts that your bankruptcy judge will not discharge.

Whether your bankruptcy judge discharges your debt or not will generally depend on the kind of debt that you have. The U.S. Courts website explains a few reasons why a bankruptcy judge may not discharge one or more of your debts.

Debts you cannot discharge

Government regulations state that certain debts are not eligible for discharge. These may include the following:

  • Guaranteed educational loans
  • Particular tax-advantaged retirement plans
  • Alimony or child support
  • Some unpaid taxes
  • Specific cooperative housing or condominium fees

A judge is also unlikely to discharge your debts if they are money you owe to someone in a personal injury case. In addition, a judge may require you to pay fines and penalties you owe the federal government or a local authority.

Differences in bankruptcy chapters

Also keep in mind that ineligible debts will vary according to the bankruptcy chapter that you file. Federal law has listed 19 different categories of debt that a bankruptcy judge will not discharge in Chapter 7 bankruptcy. However, the number of ineligible debts decreases if you file for Chapter 13. For instance, you may be able to discharge divorce settlements or money you owe from a property damage case in Chapter 13, but not in Chapter 7.

Objections to a discharge

Even if a judge can discharge a debt, be aware that your creditors may have a problem with the discharge. If so, one or more of your creditors may file an objection to the discharge. This can put the outcome of the discharge in doubt as the creditors litigate the matter. It is possible a judge may rule that the creditor has a valid claim and that you will retain responsibility for paying off the debt.