Understanding Bankruptcy Discharges

The world of finance can be complicated and many people find themselves in hot water with their bills without even knowing how it happened. While bankruptcy can present a fairly easy solution for some who have no choice, it can impact your life in a few unexpected ways. One of those is that some debts you may assume would be "forgiven" with a bankruptcy are not. Bankruptcy is a major legal action and knowing what it can and cannot do for your financial situation is vital. Read on to learn more about debts that are not dischargeable with a bankruptcy.

The general discharge order

When all is said and done with your bankruptcy, you will receive a sheath of paperwork from the federal court that handled your case. The goal of a bankruptcy is to give a full discharge of all debts you listed when you filed your case, so the paper that lists the debts that did get discharged is of utmost importance. Check this listing carefully by comparing it to your original bankruptcy filing paperwork to determine its completeness.

Some debts won't be discharged

In all likelihood, you won't need to read the final discharge to determine what did and did not pass the approval process. The debt situations listed below often pop up during the course of the bankruptcy process and you may have advance warning that certain debts or types of debts cannot be discharged. The following situations may result in debts that you must deal with after your bankruptcy is final.


When you still owe money for an asset you may have the opportunity to retain that debt voluntarily. There are several reasons to hang on to a given debt even though it would normally be discharged, but the main one is that you want to keep the property that is tied to the debt. Reaffirmations allow filers to agree to continue to pay on a loan, such as an auto loan, and that the bankruptcy court won't seize the property. This process requires that you sign a statement with your intentions and the reaffirmation must be approved by the bankruptcy court. This is a binding agreement so make sure that you can keep your payments up to date. It's worth mentioning that if you are already behind on that debt then the reaffirmation is not likely to go through.

Adversary proceedings

If a creditor comes forward to protest the inclusion of a given debt in the bankruptcy then they are bringing a challenge to the discharge with an adversary proceeding. Reasons for this to happen include fraud, misuse of credit in the time period before the filing, and providing fraudulent information when you applied for the debt. If the bankruptcy judge rules in favor of the creditor you must pay either the entire debt or a certain portion of the debt.

Speak with a bankruptcy lawyer about debts that may not be discharged with a bankruptcy.