What debts are not discharged by bankruptcy?

Not all debts are discharged by bankruptcy.  A debt that is not dischargeable is one that will survive the bankruptcy proceeding. This means that the bankruptcy debtor still has the obligation to pay the debt.  This also means that a creditor may continue to pursue payment on these debts, notwithstanding that the debtor has filed for bankruptcy relief.  There are nineteen (19) categories of debts which are not dischargeable through bankruptcy.  These nondischargeable debts include:

            (1)        Tax or custom duties (subject to certain time rules);

            (2)        Certain debts incurred due to false pretenses or statements  
                         made with the intent to deceive;

            (3)        Debts not listed on the forms and schedules filed with the
                        Court;

(4)               Fraud or defalcation committed while acting in a fiduciary capacity, embezzlement or larceny;

(5)               Domestic support obligations;

(6)               Willful and malicious injury;

(7)               Certain fines, penalties or forfeitures imposed by government agencies;

(8)               Most student loans

(9)               Death or personal injury caused by the debtor’s operation of a motor vehicle, vessel or aircraft if the debtor was intoxicated;

(10)           Debt that could have been listed of scheduled by the debtor in a prior case in which the debtor waived discharge, or was denied a discharge;

(11)           Final judgment, order or settlement agreement arising from fraud or defalcation with respect to a bank;

(12)           Malicious or reckless failure to fulfill a commitment to a bank to maintain the capital of the bank;

(13)           Payment of an order of restitution;

(14)           Debt incurred to pay certain taxes that would be nondischargeable;

(15)           Debt to a spouse, former spouse, or child incurred in the course of a divorce or separation;

(16)           Condo or homeowners association’s  maintenance fees incurred after the bankruptcy filing;

(17)           Fees imposed on a prisoner;

(18)           Debt owed to a pension, profit-sharing, stock bonus, or certain other plans; and

(19)           Judgment, order or settlement agreement from a violation of Federal securities laws or fraud or deceit in connection with the purchase or sale of any security.

For more information, contact Eugenia Chu, Attorney, at 305-379-9000 or email her at echu@kpkb.com.