What Debts Can Bankruptcy Discharge (and Which It Can't)

Short answer: Bankruptcy wipes out most everyday consumer debt — credit cards, medical bills, personal loans, most old utility bills, most lawsuit judgments, and repossession or foreclosure "deficiency" balances. It generally does not erase most student loans, recent income taxes, child support and alimony, criminal fines and restitution, debts from fraud or drunk-driving injuries, and any debt you deliberately leave off your paperwork. Which chapter you file, what kind of debt it is, and how you filled out your schedules all matter.

This is general information, not a substitute for a bankruptcy attorney looking at your specific debts. Getting the discharge wrong — filing the wrong chapter, mis-listing a creditor, missing a deadline — can cost you the fresh start you're trying to get, so treat anything beyond a simple, all-dischargeable-debt case as a reason to get a professional opinion.

The two buckets: dischargeable vs. debts that survive

"Discharge" is the bankruptcy court order that legally erases your personal obligation to pay a debt — the creditor can never sue you, call you, or report it as owed again. Congress decided some debts are too important (support for your kids), too recent (taxes you just owed), or too tainted (fraud, drunk-driving injury, criminal restitution) to wipe out. Those exceptions are listed in the Bankruptcy Code at 11 U.S.C. § 523 (individual debts) and, for the discharge itself, 11 U.S.C. § 727 (Chapter 7) and 11 U.S.C. § 1328 (Chapter 13).

Debts bankruptcy typically discharges

• Credit card balances, including store cards and accumulated interest/late fees
• Medical bills — hospital, ambulance, doctor, and collection-agency medical debt
• Personal loans from a bank, credit union, online lender, or friend/family, if not obtained by fraud
• Most civil lawsuit judgments, such as an unpaid contract or debt-collection judgment (judgments for fraud, willful injury, or drunk-driving are the exception — see below)
• Repossession and foreclosure "deficiency balances" — the gap left after a car or home sells for less than you owed
• Old utility, phone, and cable bills; payday loans; old rent and lease-breakage debt owed to a former landlord
• Overdrawn bank accounts and NSF/overdraft debt
• Co-signed debts — your discharge protects you personally, but doesn't erase a co-signer's own obligation

Debts that generally survive bankruptcy

• Most federal and private student loans — dischargeable only if you separately prove "undue hardship," historically a high bar (see below)
• Recent income taxes — older tax debt can sometimes be discharged if it meets timing rules; payroll/trust-fund taxes and unfiled-return taxes generally cannot
• Child support and alimony (domestic support obligations) — never dischargeable, in any chapter
• Debts from fraud — money, property, or credit obtained by false pretenses, a false financial statement, or embezzlement
• Debts for willful and malicious injury to a person or their property
• Death or injury caused by driving under the influence
• Criminal fines, penalties, and restitution
• Most government fines and penalties that aren't compensation for actual pecuniary loss
• Debts you failed to list on your schedules (with limited exceptions), or debts owed to a creditor you didn't properly notify
• Recent luxury purchases and cash advances — the law presumes certain purchases or cash advances made shortly before filing were never meant to be repaid, and treats them as nondischargeable fraud unless you can show otherwise

For the full, authoritative list of exceptions with the exact legal language, see 11 U.S.C. § 523 on the government's own govinfo.gov U.S. Code page, or the plain-language overview from the U.S. Courts' Bankruptcy Basics series.

The recent-purchase and cash-advance trap

If you ran up credit cards on non-essentials — vacations, electronics, gift cards — shortly before filing, a creditor can ask the court to declare those specific charges nondischargeable as presumed fraud under 11 U.S.C. § 523(a)(2)(C), which sets time windows and dollar thresholds that change with inflation and which courts apply strictly. If you're thinking about filing, stop using credit for anything but true necessities, and talk to an attorney before you file rather than after.

Student loans: hard, but not always impossible

Student loans aren't automatically excluded from bankruptcy — you can discharge them, but only by proving repayment would impose an "undue hardship" on you and your dependents, typically through a separate lawsuit ("adversary proceeding") inside your case. Since November 2022, the Department of Justice and Department of Education have used a more standardized process for federal loans: you fill out an attestation form about your current and likely future finances and past good-faith repayment efforts, and government attorneys use it to decide whether to recommend discharge. It's made discharge realistically achievable for more borrowers with serious, long-term hardship — but it's still case-by-case, not automatic, and this guidance can change, so confirm the current process before you rely on it. See the U.S. Trustee Program's student loan guidance and studentaid.gov. Private student loans that count as qualified education loans follow the same undue-hardship standard but don't go through the DOJ/ED process, so they typically need their own adversary proceeding.

Taxes: timing decides everything

Income tax debt can sometimes be discharged, but only if it satisfies several timing rules at once: the three-year rule (the return was due, with extensions, more than three years before filing), the two-year rule (you actually filed the return more than two years before filing), and the 240-day rule (the IRS assessed the tax more than 240 days before filing, with pauses for offers-in-compromise or a prior bankruptcy). Miss any one, or never file the return at all, and the debt survives. Payroll/trust-fund taxes generally can't be discharged in any circumstance. See the IRS's Publication 908, Bankruptcy Tax Guide, for how these rules apply to your specific tax years — this is a technical corner of the law and a good reason to get an attorney's help before assuming old taxes are dischargeable.

Unsecured, secured, and priority debt — why the label matters

Even a fully dischargeable debt is treated differently depending on its legal category:

• Unsecured debt — no property backs it up (credit cards, medical bills, personal loans, most judgments). This is what bankruptcy is best at eliminating.
• Secured debt — a specific piece of property (your car, your house) backs the loan. Bankruptcy discharges your personal liability to pay, but not the lender's lien — to keep the car or house, you generally have to keep paying (or "reaffirm" the debt in Chapter 7, or pay it through your Chapter 13 plan). Stop paying, and the lender can still repossess or foreclose after your case ends.
• Priority debt — Congress ranked certain debts (recent taxes, domestic support arrears, some employee wage claims) ahead of ordinary unsecured debt under 11 U.S.C. § 507. Many priority debts are also nondischargeable, which is why the two lists overlap so much.

Chapter 7 vs. Chapter 13: does the chapter change what's dischargeable?

Mostly no — the core § 523 exceptions apply to both chapters. But Chapter 13's discharge, granted after a three-to-five-year repayment plan, is slightly broader than Chapter 7's for a narrow set of debts (some divorce property-settlement debts that aren't support, and willful/malicious injury to property rather than a person, can sometimes be discharged in Chapter 13 but not Chapter 7). It's a technical distinction and one reason people choose Chapter 13 despite the longer commitment — worth raising with an attorney if your debt falls in that gray zone.

The paperwork trap: debts you forget to list

Your discharge only protects debts you actually disclose, with a correct, current address for each creditor. If you forget a creditor or guess at an old address, that creditor may never get notice of your case — and, especially where there are assets to distribute or a filing deadline to meet, a debt with no proper notice may not be discharged. Before filing, pull a full credit report from all three bureaus and go through old mail so nothing gets missed. If you discover a missed debt after filing, tell your attorney right away; in many cases the schedules can still be amended.

What to do

1. List every debt, with current names and addresses, before you file — an unlisted debt may not get discharged.
2. Sort your debts into the categories above — dischargeable, survives, secured vs. unsecured — so you know what filing will and won't fix.
3. Stop new credit charges and cash advances once you're seriously considering filing, to avoid the recent-purchase fraud presumption.
4. If you have federal student loans, ask your attorney about the DOJ/ED attestation process rather than assuming they're untouchable.
5. If you have old tax debt, get your account transcripts from the IRS and have an attorney check the three-year/two-year/240-day timing before you file.
6. Complete your credit-counseling and financial-management courses — one before filing, one before discharge — through a U.S. Trustee-approved agency; skipping either can block your discharge entirely. The current approved list is on the U.S. Trustee Program's website.
7. Talk to a bankruptcy attorney if your debts include anything on the "survives" list, if you're unsure which chapter fits, or if you have property you're worried about protecting — your state's exemption rules decide what you keep, and the dollar figures are adjusted for inflation over time.

Beware debt-relief and debt-settlement pitches

If you're behind on debt, you're likely being targeted by for-profit "debt settlement," "debt relief," or "debt consolidation" companies that charge large upfront fees, tell you to stop paying creditors while your money sits in a settlement account, and often leave you worse off before anything gets settled. Non-attorney "bankruptcy petition preparers" who give legal advice about what to file or how to protect assets are operating illegally; they may only type your paperwork, not advise you. The FTC has guidance on coping with debt and spotting settlement scams, and the CFPB publishes plain-language guidance at consumerfinance.gov. If cost is the barrier to a real attorney, try legal aid, a law-school bankruptcy clinic, your local bankruptcy court's self-help resources, or a nonprofit agency on the U.S. Trustee's approved counseling list — not a company advertising "debt forgiveness" on late-night TV.

This article is general legal information, not legal advice, and reading it does not create an attorney-client relationship. Bankruptcy outcomes depend on your specific debts, assets, and state law, and the governing dollar figures change over time — talk to a licensed bankruptcy attorney, or a U.S. Trustee-approved credit-counseling agency if you can't afford one, before you decide what to file.