Filing for bankruptcy can provide powerful relief from overwhelming debt—but it does not eliminate every type of financial obligation. One of the most important things to understand before filing is which debts will remain after your case is complete.
At Berken Cloyes, we help individuals throughout Denver, CO make informed decisions about bankruptcy by clearly outlining what to expect. Knowing which debts are not discharged can help you plan ahead, avoid surprises, and choose the right strategy for your situation.
What Does It Mean for a Debt to Be Discharged?
A discharged debt is one that you are no longer legally required to repay. Once discharged, creditors are prohibited from attempting to collect that debt through calls, letters, lawsuits, or other actions.
However, bankruptcy law makes a distinction between dischargeable and non-dischargeable debts. While many unsecured debts can be eliminated, certain obligations are excluded due to public policy or legal protections.
Why Some Debts Cannot Be Discharged
Not all debts are treated equally under bankruptcy law. Certain obligations are considered too important to eliminate, often because they involve government interests, public welfare, or legal accountability.
These debts typically fall into categories such as taxes, family support, and debts involving misconduct.
Common Debts That Are NOT Discharged in Bankruptcy
Student Loans
Student loan debt is one of the most commonly misunderstood areas of bankruptcy. In most cases, student loans cannot be discharged unless you can prove “undue hardship,” which requires a separate legal process and is difficult to meet.
While not impossible, discharge of student loans is rare, making it important to evaluate alternative strategies if this is a major portion of your debt.
Recent Tax Debt
Tax debt is complex. Some older income tax debts may be dischargeable under specific conditions, but many types of tax obligations are not.
- Recent income tax debt is typically not dischargeable
- Payroll taxes are not dischargeable
- Tax penalties may or may not qualify depending on timing
If you’re dealing with IRS issues, you can learn more about tax debt and bankruptcy in Denver and how these situations are handled.
Child Support and Alimony
Domestic support obligations—including child support and alimony—are never discharged in bankruptcy. These payments are prioritized and must continue regardless of your filing.
In fact, failing to stay current on these obligations can impact your bankruptcy case.
Debts from Fraud or Misrepresentation
If a creditor can prove that a debt was incurred through fraud, false statements, or intentional misconduct, that debt may be excluded from discharge.
This can include:
- Credit obtained through false information
- Intentional misuse of credit cards
- Certain financial misrepresentations
Court Fines, Penalties, and Restitution
Criminal fines, penalties, and court-ordered restitution are not dischargeable. These obligations are treated separately from standard consumer debt.
Debts from Willful or Malicious Injury
If a debt results from intentional harm to another person or property, it may not be discharged.
Debts That Are Typically Discharged
Even though some debts remain, many of the most burdensome financial obligations can be eliminated through bankruptcy.
These often include:
- Credit card balances
- Medical bills
- Personal loans
- Collection accounts
This is why bankruptcy can still provide significant relief, even if certain debts remain.
Chapter 7 vs Chapter 13: How It Impacts Your Debts
The type of bankruptcy you file can affect how your debts are handled.
Chapter 7 Bankruptcy
Chapter 7 focuses on eliminating qualifying unsecured debts quickly. However, non-dischargeable debts will still remain after the case is complete.
Chapter 13 Bankruptcy
Chapter 13 allows you to restructure your debts into a manageable repayment plan. While non-dischargeable debts are not eliminated, they can often be reorganized and paid over time.
To understand which option is best, see our breakdown of Chapter 7 vs Chapter 13 bankruptcy.
Can Non-Dischargeable Debts Still Be Managed?
Yes. Even if certain debts cannot be eliminated, bankruptcy can still provide important benefits:
- Stops collection actions through the automatic stay
- Prevents wage garnishments and lawsuits
- Frees up income by eliminating other debts
- Allows structured repayment in Chapter 13
For example, removing credit card and medical debt may make it easier to stay current on tax obligations or support payments.
Why This Matters Before You File
Understanding which debts will remain after bankruptcy is critical for making the right decision.
Filing without this knowledge can lead to:
- Unexpected financial obligations after discharge
- Poor planning for repayment
- Missed opportunities to choose a better strategy
A clear evaluation upfront ensures you move forward with confidence.
Get Clear Answers About Bankruptcy in Denver, CO
Every financial situation is different. The only way to know exactly how bankruptcy will affect your debts is to speak with an experienced attorney.
At Berken Cloyes, we help individuals throughout Denver, CO understand their options, protect their assets, and move toward a stronger financial future.
Call today to schedule your consultation and get clear answers about your situation.
