Chapter 7 · Beverly Hills
Debts Chapter 7 Will Not Discharge
The debts Chapter 7 will not discharge include child support, alimony, most recent taxes, most student loans and criminal fines. Debts from fraud or willful injury also survive if the creditor proves its case in court. Call (310) 362-9071 to find out which of your debts would remain and what else you can do.
- The list of debts that survive is in 11 U.S.C. section 523(a).
- Some survive on their own. Others survive only if the creditor sues.
- Chapter 13 can help you pay some of these debts over time.
At a glance
The debts Chapter 7 does not wipe out
Federal law lists the debts Chapter 7 will not discharge. Here they are in plain words.
- Child support and alimony. Support owed to a child, spouse or former spouse is never discharged.
- Other divorce debts. Property settlement debts owed to a former spouse under a divorce order also survive Chapter 7.
- Recent income taxes. Taxes for returns due within the last 3 years, taxes assessed within the last 240 days, and taxes for years you never filed or filed late within 2 years of bankruptcy all survive.
- Taxes tied to fraud. Taxes on a fraudulent return, or taxes you tried to evade on purpose, survive no matter how old.
- Most student loans. Federal and most private student loans survive unless you prove "undue hardship" in a separate court case.
- Criminal fines and restitution. Government fines and penalties, and criminal restitution orders, survive.
- Drunk driving injuries. Debts for death or injury caused while driving drunk or high survive.
- Debts from fraud. Money, property or credit you got by lying, or with a false written financial statement, can survive.
- Embezzlement and fiduciary fraud. Debts from fraud while acting as a trustee or in a similar role, and debts from embezzlement or theft, can survive.
- Willful and malicious injury. Debts for harm you caused on purpose to a person or property can survive.
- Debts you leave off your forms. In some cases, a debt you fail to list can survive. List everything.
Taxes have extra timing rules. See IRS tax debt in bankruptcy. California income taxes follow similar timing rules. For school loans, see student loan discharge.
Which debts need a creditor lawsuit and which survive on their own
Some non-dischargeable debts survive automatically. Others are wiped out unless the creditor takes action.
| Survives on its own | Survives only if the creditor sues and wins |
|---|---|
| Child support and alimony | Debts from fraud or false pretenses |
| Recent and unfiled income taxes | Debts from embezzlement, theft or fiduciary fraud |
| Government fines and penalties | Debts from willful and malicious injury |
| Criminal restitution | |
| Drunk driving injury debts | |
| Student loans (you must sue to discharge them) |
For fraud, embezzlement and willful injury, the creditor must file a lawsuit inside your bankruptcy case, called an adversary proceeding. There is a short deadline, counted from the first date set for your 341 meeting of creditors. If the creditor misses it, the debt is discharged.
If a creditor does sue, you need to respond on time. See adversary proceeding defense.
What Chapter 13 can do for debts that survive Chapter 7
Chapter 13 does not erase support or recent taxes either. But it gives you a way to pay them on a schedule while the court protects you.
- Time to pay priority debts. Recent taxes and back support are "priority" debts. A Chapter 13 plan pays them in full over 3 to 5 years.
- Protection from collection. While your plan is in effect, the automatic stay stops most tax levies and collection on other debts.
- A broader discharge. Some debts that survive Chapter 7, such as property settlement debts from a divorce, can be discharged when you finish a Chapter 13 plan.
The stay does not stop support collection from income in most cases. Learn more about Chapter 13 bankruptcy, or compare the two on our Chapter 7 vs Chapter 13 page. For the full process, see our Chapter 7 bankruptcy overview.
Common mistakes about non-dischargeable debts
- Assuming all taxes survive. Older income taxes can be wiped out if they meet the timing rules.
- Assuming a fraud claim always wins. The creditor has to prove it in court. Many never file.
- Ignoring a creditor's lawsuit. If you do not respond, the court can rule against you by default.
- Filing too soon. A few months can turn a recent tax into one that can be discharged.
- Making big charges right before filing. Recent luxury purchases and cash advances can be presumed fraud. See what debts Chapter 7 wipes out.
What it costs
- Chapter 7: flat attorney fee from $1,200, plus the $338 court filing fee
- Chapter 13: attorney fee quoted in writing, and part of it can be paid through the plan
- Payment plans are available, and the first consultation is free
More on Chapter 7 bankruptcy
- Chapter 7 bankruptcy in Beverly Hills
- California Median Income Figures for the Means Test
- What Debts Are Wiped Out in Chapter 7
- Debts Chapter 7 Will Not Discharge
- Can I Keep My Car in Chapter 7?
- Can I Keep My House in Chapter 7?
- The Chapter 7 Timeline, From Filing to Discharge
- What the Chapter 7 Trustee Looks For
- Filing Chapter 7 With No Income or Between Jobs
- Filing a Second Chapter 7: The Eight-Year Rule
- Chapter 7 for Married Couples: Filing Alone or Together
- What Happens at the 341 Meeting of Creditors
- Redeeming a Car in Chapter 7
- Means test evaluation
- Reaffirmation agreements
Questions about debts that survive
Will Chapter 7 discharge child support or alimony?
No, Chapter 7 will not discharge child support or alimony. Back support stays owed, and the court that set it can still enforce it.
Can student loans be discharged in Chapter 7?
Student loans can be discharged in Chapter 7 only if you prove "undue hardship" in a separate lawsuit in the bankruptcy court. It is hard but not impossible. We look at your income, health and loan history before you decide.
Will Chapter 7 discharge my tax debt?
Chapter 7 will discharge some older income tax debt, but not recent taxes or taxes tied to fraud. Each tax year is checked against the 3-year, 2-year and 240-day rules.
What if a creditor says my debt was fraud?
If a creditor says your debt came from fraud, it must file a lawsuit in your bankruptcy case before a deadline. If it never files, the debt is discharged. If it does, you can defend the case.
Are traffic tickets and court fines wiped out in Chapter 7?
No, traffic tickets and court fines owed to a government are usually not wiped out in Chapter 7. We can tell you which kind of fine you have and what your options are.
Free consultation
Know what will be left after your case
Call (310) 362-9071 or send the form. We will sort your debts into what Chapter 7 can and cannot discharge at a free consultation.
Law Offices of John Asuncion9454 Wilshire Blvd., Penthouse Floor
Beverly Hills, CA 90212
(310) 362-9071
Monday to Friday, 9 a.m. to 6 p.m.