Will Bankruptcy Discharge All My Debts?

Yes, with some exceptions.  Bankruptcy will not normally discharge the following obligations:

1. Most taxes.  The vast majority of tax debts cannot be discharged.  However, this can be a very complicated issue.  If you have tax debts you will need to discuss these issues with your attorney.
    

2. Money borrowed by fraud or false pretenses.  A creditor may try to prove in court during your bankruptcy case that you lied or defrauded them, so that your debt cannot be discharged.  A few creditors (mainly credit card companies) accuse debtors of fraud even when they have done nothing wrong.  Their goal is to scare honest families so that they agree to reaffirm the debt.  You should not agree to reaffirm a debt if you have done nothing wrong.  If the company files a fraud case and you win, the court may order the company to pay your attorney’s fees.
    

3. Debts not listed on your bankruptcy petition.
    

4. Debts resulting from your fraud or theft while action as a fiduciary, embezzlement, or larceny.
    

5. Alimony, maintenance or support for a former spouse or children.
    

6. Debts resulting from your “willful and malicious” harm to another or their property.
    

7. Most criminal fines, penalties and restitution orders.  This exception includes even minor fines, including traffic tickets.
    

8. Student loans.  Almost no student loans are discharged by bankruptcy.  But you can ask the court to discharge the loans if you can prove that paying them is an “undue hardship.”  This exception only applies in the rarest of cases.  Occasionally, student loans can be canceled for reasons not related to your bankruptcy when, for example, the school closed before you completed the program or if you have become disabled.  There are also many options for reducing your monthly payments on student loans, even if you can’t discharge them.
    

9. Debts resulting from drunk driving claims.

This is by no means a complete list of the debts that are not discharged in bankruptcy.  However, this lists most of the most common exceptions that affect individual consumer debtors.

If you have debts that may not be discharged, you should discuss with your attorney whether filing or converting to a chapter 13 may help.