Bankruptcy does not clear all debt. A discharge permanently erases most unsecured obligations—credit card balances, medical bills, old personal loans, and similar debts—but federal law carves out specific categories that survive the case no matter what you do. Child support, alimony, most student loans, recent tax debts, criminal fines and restitution, debts from drunk-driving injuries, and debts obtained by fraud all remain your responsibility after the court closes the case. The chapter you file under also changes the answer, and secured debts like a mortgage or car loan follow their own rules.
Debts Bankruptcy Usually Erases
Unsecured debts—those with no collateral behind them—are what a discharge is built to eliminate. Credit card balances are the most common example, and they are generally wiped out in full without any further payment.1United States Courts. Discharge in Bankruptcy – Bankruptcy Basics Medical bills are treated the same way, whether or not they have already been sent to a collection agency.
Other debts commonly erased include:
- Personal loans from banks, credit unions, or online lenders.
- Past-due utility balances owed to electric, gas, water, or phone companies.
- Deficiency balances left after a car repossession and resale.
- Money judgments from civil lawsuits based on dischargeable debt, such as a credit card collection suit.
- Debts you forgot to list, in a Chapter 7 no-asset case where the trustee does not distribute funds to creditors. In asset cases, unlisted debts may survive.
Once these debts are discharged, creditors cannot garnish your wages, freeze your bank accounts, or sue you over the balance. If a creditor ignores the discharge order and keeps trying to collect, the court can hold that creditor in civil contempt.2Office of the Law Revision Counsel. 11 USC 524 – Effect of Discharge
Debts That Survive Bankruptcy No Matter What
Congress has put certain obligations off-limits to discharge in both Chapter 7 and Chapter 13. These are the debts that follow you out of bankruptcy.
Child Support and Alimony
Domestic support obligations—child support, alimony, and spousal maintenance—cannot be discharged under any chapter of the Bankruptcy Code.1United States Courts. Discharge in Bankruptcy – Bankruptcy Basics They keep their full force, and even the automatic stay that halts most collection activity when you file does not stop support collection from non-estate property. Falling behind can still lead to license suspension, wage withholding, or contempt of court.
Recent Tax Debts
Most tax debts are non-dischargeable. Older income tax obligations can sometimes be wiped out, but only if all three of these conditions are met:
- The return was originally due, including extensions, at least three years before you filed for bankruptcy.
- You actually filed the return at least two years before your petition.
- The IRS assessed the tax at least 240 days before your filing date.
Miss any of those, and the tax debt remains fully collectible.3Internal Revenue Service. Publication 908, Bankruptcy Tax Guide The IRS can keep levying your bank accounts and intercepting future refunds. Payroll taxes that employers withhold from employee wages—known as trust fund taxes—are never dischargeable, regardless of age.4Internal Revenue Service. Declaring Bankruptcy Fraud penalties and taxes from returns you never filed are also excluded.
Most Student Loans
Federal and private student loans are presumed non-dischargeable. To overcome that presumption, you have to file a separate lawsuit inside your bankruptcy case, called an adversary proceeding, and prove that repaying the loans would impose an undue hardship on you and your dependents.5Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge Most courts use a three-part test that looks at whether you can maintain a minimal standard of living while repaying the loans, whether your financial difficulties are likely to continue for a significant portion of the repayment period, and whether you have made good-faith efforts to repay in the past.
Historically, few borrowers even tried, because success rates were low. The U.S. Department of Education issued updated guidance in 2024 acknowledging that borrowers had been deterred by the low probability of success and directing federal loan holders to take a more realistic approach when evaluating hardship claims in these proceedings.6Federal Student Aid Partners. Undue Hardship Discharge of Title IV Loans in Bankruptcy Adversary Proceedings Discharge has become somewhat more accessible as a result, though it still requires litigating a separate proceeding.
Government Fines and Criminal Restitution
Fines and penalties owed to a government agency cannot be discharged, and neither can court-ordered restitution to crime victims.5Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge The law is designed to prevent anyone from using bankruptcy to sidestep the financial consequences of a criminal conviction or a regulatory violation.
Drunk-Driving Injury Debts
Any liability for death or personal injury caused by operating a motor vehicle while intoxicated is permanently excluded from discharge in both Chapter 7 and Chapter 13.1United States Courts. Discharge in Bankruptcy – Bankruptcy Basics
Fraud, Recent Luxury Spending, and Cash Advances
Bankruptcy is built for honest debtors, not for people who load up a card knowing they will not repay. The law creates presumptions of fraud around certain last-minute spending:
- Charges of more than $900 to a single creditor for luxury goods or services made within 90 days of filing are presumed non-dischargeable.
- Cash advances totaling more than $1,250 taken within 70 days of filing face the same presumption.
You can try to show the spending was not fraudulent, but the burden shifts to you. Beyond those thresholds, any debt obtained through false pretenses, a false representation, or actual fraud is non-dischargeable if the creditor files a timely challenge.5Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge Debts arising from intentional and malicious injury to another person or their property are also protected from discharge.1United States Courts. Discharge in Bankruptcy – Bankruptcy Basics
Secured Debts: The Lien Survives Even When the Debt Doesn’t
A mortgage or a car loan involves two separate legal obligations: your personal promise to repay, and the creditor’s lien on the property. Bankruptcy can eliminate your personal liability, but it does not remove the lien. That distinction is what trips people up.
If you stop paying your mortgage after receiving a discharge, the lender cannot sue you personally for any remaining balance. It can, however, still foreclose on the house because the lien survives. The same rule applies to car loans: the discharge wipes out your personal obligation, but the lender can still repossess the vehicle if payments stop.
Reaffirmation
If you want to keep a secured asset and keep paying on it, you can sign a reaffirmation agreement. This waives the discharge for that specific debt, so you remain personally liable. The agreement must be filed with the court before your discharge is entered, and you have 60 days after filing it (or until the discharge date, whichever is later) to change your mind and rescind it.7Office of the Law Revision Counsel. 11 USC 524 – Effect of Discharge If you were not represented by an attorney during the negotiation, the court must approve the agreement as being in your best interest and not imposing an undue hardship.
Redemption
In a Chapter 7 case, you have an alternative for personal property like a car. Instead of reaffirming the full loan balance, you can redeem the property by paying the creditor its current market value in a single lump sum. If you owe $12,000 on a car worth $7,000, redemption lets you keep the car for $7,000.8Office of the Law Revision Counsel. 11 USC 722 – Redemption The catch is the lump sum. This option only applies to tangible personal property used for personal or household purposes, not to real estate.
Chapter 7 vs. Chapter 13: What Changes
The chapter you file under decides not only the process but also the range of debts that can be erased. Chapter 7 is a liquidation. A trustee sells non-exempt assets to pay creditors, and you receive a discharge of qualifying debts in roughly three to four months. Chapter 13 is a court-supervised repayment plan lasting three to five years, and the discharge arrives only after you complete the plan.
Chapter 13 wipes out a slightly broader set of debts than Chapter 7. Debts that can be discharged in Chapter 13 but not in Chapter 7 include:
- Debts for willful and malicious injury to property (but not to a person).
- Financial obligations from a property division in a divorce or separation agreement. Child support and alimony still cannot be discharged.
- Debts you incurred to pay a non-dischargeable tax, such as putting the tax on a credit card.
These additional discharges only come through after you finish the full repayment plan.9United States Courts. Chapter 13 – Bankruptcy Basics
Chapter 13 also gives co-signers a break. If a friend or family member co-signed a consumer debt for you, creditors generally cannot pursue the co-signer while your Chapter 13 plan is active.10Office of the Law Revision Counsel. 11 USC 1301 – Stay of Action Against Codebtor The protection ends if your case is dismissed, converted to Chapter 7, or if your plan does not propose to pay the co-signed debt. In Chapter 7, no such protection exists, and creditors can go straight after your co-signer for the full balance.
When the Discharge Actually Happens
The discharge does not happen the moment you file. In a Chapter 7 case, it usually arrives about three to four months after filing. In Chapter 13, you receive it only after finishing the three-to-five-year repayment plan. Either way, the discharge order only covers debts the law allows to be eliminated. Everything else remains fully enforceable.
A discharge does not mean the debt never existed. It means you are no longer personally on the hook. Individual discharged accounts should be updated on your credit report to show a zero balance, and if a creditor reports otherwise, you can dispute the entry with the credit bureau.
What Bankruptcy Cannot Pause
Filing does trigger an automatic stay that immediately halts most collection activity—lawsuits, wage garnishments, foreclosure proceedings, repossession attempts, and creditor calls.11Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay But the stay has limits worth knowing before you file. It does not stop criminal proceedings against you, and it does not block collection of child support or alimony from non-estate property. Family court proceedings involving custody, visitation, paternity, and domestic violence also continue. Creditors can ask the bankruptcy court to lift the stay for cause, such as when you have no equity in a property and it is not necessary for your reorganization. The stay ends when the case is closed, dismissed, or when you receive your discharge.
The short version: bankruptcy is a powerful tool against consumer debt, but it is not a universal reset. Before you file, look hard at what you owe and sort it into the piles above. If most of your debt is credit card balances, medical bills, and old unsecured loans, a discharge does most of the work. If the bulk of what is crushing you is child support, recent taxes, student loans, or a criminal restitution order, bankruptcy alone will not fix it.