When an individual files for bankruptcy, many of his debts are discharged after some of his non-exempt property is liquidated for the benefit of his creditors. In the event there are any non-exempt properties.
When a debt is discharged, the former creditor can no longer pursue collection action of any kind against the former debtor; the debt has effectively been cancelled. However, not all debts can be cancelled.
Tax debt generally cannot be discharged, and any criminal fines or debts associated with court-ordered judgments regarding criminal activity usually cannot be discharged. This typically includes judgments pertaining to negligence, personal injury, DUI and the like.
Any debts incurred through fraudulent activity are similarly rarely discharged. For instance, a debtor that knowingly incurs large debts shortly prior to filing their bankruptcy petition may not be discharged of those debts.
Child support and spousal support are also not discharged, and student loans are very rarely discharged, except in the case that they place “undue hardship” on the debtor or the debtor’s dependents.
Any loans not declared on the bankruptcy petition are typically not discharged, either.
There may be other debts that cannot be discharged in the case of a specific individual, so it may be advisable to check one’s local laws and contact a bankruptcy attorney for specific questions about bankruptcy law
Dated: October 30, 2012
