Table of Contents
- Does Bankruptcy Eliminate All Debts? Breaking Down Dischargeable vs. Non-Dischargeable Debts
- What Is a Debt Discharge?
- Common Dischargeable Debts
- Non-Dischargeable Debts: What Bankruptcy Doesn’t Erase
- Always Non-Dischargeable (in most cases):
- Potentially Non-Dischargeable (if challenged by a creditor):
- Chapter 13: Special Treatment for Non-Dischargeable Debts
- Why It Matters to Know the Difference
- Bottom Line: Bankruptcy Discharges Most, But Not All Debts
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Understanding the distinction between dischargeable and non-dischargeable debts is crucial for anyone considering bankruptcy. This blog post will clarify which debts can be eliminated through bankruptcy and which ones typically remain, providing insights that can help you navigate your financial future with the guidance of a qualified attorney near you.
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Learn about bankruptcy and its impact on your debts in this comprehensive guide. Discover the difference between dischargeable and non-dischargeable debts, and understand the importance of consulting a bankruptcy attorney near you to navigate your financial recovery effectively.
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Flat vector illustration showing dischargeable debts being removed and non-dischargeable debts remaining, with a bankruptcy attorney near you helping guide the debtor through the bankruptcy process.
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Mar 30, 2025 06:19 PM
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Does Bankruptcy Eliminate All Debts? Breaking Down Dischargeable vs. Non-Dischargeable Debts
One of the most common misconceptions about bankruptcy is that it wipes out every single debt you owe. While bankruptcy offers powerful relief, not all debts are created equal—and not all debts are dischargeable.
In this post, we’ll clarify which types of debt bankruptcy can eliminate (dischargeable) and which ones generally stick with you no matter what (non-dischargeable). Understanding this distinction is key to forming realistic expectations—and knowing when to speak with a bankruptcy attorney near you to develop the best legal strategy.
💡 For every post in this series, scroll down to “Related Posts.”
What Is a Debt Discharge?
A discharge in bankruptcy is a court order that legally eliminates your obligation to repay certain debts. Once discharged, creditors cannot legally collect from you. It’s the primary goal of most personal bankruptcies and provides that coveted “fresh start.”
Common Dischargeable Debts
In most Chapter 7 and Chapter 13 cases, the following debts are typically dischargeable:
- Credit card debt
- Medical bills
- Personal loans and payday loans
- Utility bills and old rent balances
- Repossessed car or lease deficiencies
- Certain tax penalties (in limited cases)
- Judgments from lawsuits (except fraud-related cases)
Non-Dischargeable Debts: What Bankruptcy Doesn’t Erase
Some debts cannot be wiped out in bankruptcy—either by law or unless you take additional legal steps.
Always Non-Dischargeable (in most cases):
- Student loans (except in rare cases of undue hardship)
- Child support and alimony
- Certain taxes (especially recent income tax debts)
- Fines and penalties owed to the government
- Restitution from criminal convictions
- Debts from DUI-related injuries
Potentially Non-Dischargeable (if challenged by a creditor):
- Debts obtained through fraud or misrepresentation
- Debts from willful and malicious injury to others or property
- Luxury purchases or cash advances taken shortly before filing
Creditors can file an adversary proceeding to challenge the discharge of these debts—so it’s essential to work with a bankruptcy lawyer near you who can defend your interests.
Chapter 13: Special Treatment for Non-Dischargeable Debts
In Chapter 13 bankruptcy, you still repay non-dischargeable debts through your plan. However, it gives you more time and protection (e.g., stopping garnishments) while you catch up on these obligations.
See Chapter 13 Bankruptcy: The Repayment Plan in Detail for how it handles priority debts like taxes and support.
Why It Matters to Know the Difference
Understanding what debts you can and cannot eliminate helps you:
- Set realistic financial goals
- Choose the right bankruptcy chapter
- Plan for life after discharge
It also highlights the importance of tackling non-dischargeable debts early in the process with the help of a bankruptcy attorney near you who can offer targeted solutions.
Bottom Line: Bankruptcy Discharges Most, But Not All Debts
Bankruptcy can be life-changing—but it’s not a magic eraser. Knowing which debts stay and which go can help you make smart legal decisions, protect your assets, and begin your financial recovery with clarity.
ReferU.AI connects you with a qualified bankruptcy attorney near you who can explain dischargeable vs. non-dischargeable debts in your specific case and help you build a strategy that truly offers relief.
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