The Short Answer
Bankruptcy is a powerful tool, but it doesn't wipe out every debt. The most common non-dischargeable debts include most taxes, federal student loans, domestic support obligations like child support and alimony, and any debts you take on after filing. Debts incurred within 90 days of filing can also be denied discharge if the court determines they were fraudulent — for example, running up credit cards when you already knew you were going to file.
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Whether filing for a Chapter 7 bankruptcy or Chapter 13 bankruptcy, there are certain debts that you may not discharge when filing your petition. These debts include the following:
Federal taxes and state taxes are typically not wiped out in bankruptcy. Any type of lien issued by the government is not eligible to be discharged through the bankruptcy. We will include your debt in the bankruptcy petition so that the State of Federal authority will be notified of your filing. It is your responsibility to contact the IRS or State to make payment arrangement. If you fail to pay your current tax bill or repay your back taxes, the State or IRS would likely put a lien on your home or another asset that you own. However, there are certain times where taxes may be wiped out. However, it is very rare that you will be able to have taxes wiped out.
Government loans such as federal student loans cannot be discharged through bankruptcy and must be paid back, in full, to the agency that issued the loan.
Court ordered domestic support obligations may supersede the Bankruptcy filing. For instance, if you have a court ordered child support or alimony payment already in place with the Court, this payment is not a viable debt to be discharged in bankruptcy. If you fail to make these payments, the Court may garnish your wages in order to collect the debt.
Any debts incurred AFTER you have filed your bankruptcy petition may not be wiped out. You may not incur additional debt and then contact your attorney requesting that the debt be added to your bankruptcy filing. This is fraud and could result in further legal action.
Debts incurred within ninety (90) days of filing your petition are closely scrutinized by the Bankruptcy court and may not be eligible for discharge with your Bankruptcy filing if they are deemed to be fraudulent. If you go out and purchase items on a credit card, knowing that you were then going to file bankruptcy, the debts will not be wiped out.
Key Takeaways
- Most federal and state tax debts survive bankruptcy, and if left unpaid, the IRS or state can place a lien on your home or other assets.
- Federal student loans cannot be discharged in bankruptcy and must be repaid in full to the issuing agency.
- Court-ordered child support and alimony are not dischargeable — these obligations continue regardless of your bankruptcy filing.
- Any debt you incur after filing your bankruptcy petition cannot be added to your case; attempting to do so is considered fraud.
- Debts charged within 90 days before filing are closely scrutinized by the bankruptcy court and may be denied discharge if they appear fraudulent.
- Knowing which debts survive bankruptcy before you file helps you go in with realistic expectations and a solid plan for what you'll still owe.
Attorney Insight
The mistake I see most often is a client who charges groceries, medical co-pays, or even a vacation on a credit card in the months before filing, assuming it'll all get wiped out — then being blindsided when those charges are flagged as potentially fraudulent. Bankruptcy trustees in both MDNC and WDNC routinely scrutinize recent credit card activity, and luxury purchases or cash advances within 90 days of filing carry a legal presumption of non-dischargeability. On the tax side, people are often surprised to learn that while most recent tax debts don't get discharged, older income tax debts sometimes can — but the rules around that are very specific and easy to get wrong without experienced guidance. If you're unsure whether a debt will survive your filing, ask before you file, not after.
