Allowed Debts

Regarding debts, you may want to know if all of the debts are discharge or just some. Not all debts are discharged. The debts discharged vary under each the boards of the Bankruptcy Code. Section 523(a) of the Code specifically excepts various categories of debts from the discharge granted to individual debtors. Therefore, the debtor must still repay those debts after bankruptcy. Congress has determined that these types of debts are not dischargeable for public policy reasons (based either on the nature of the debt or the detail that the debts were incurred due to improper behavior of the debtor, such as the debtor’s drunken driving).

There are 19 categories of debt excepted from discharge under chapters 7, 11, and 12. A more limited list of exceptions applies to cases under the boards 13.
Generally speaking, the exceptions to discharge apply automatically if the language prescribed by section 523(a) applies. The most common types of nondischargeable debts are certain types of tariff claims, debts not set forth by the debtor on the lists and schedules the debtor must file with the court, debts for spousal or child support or alimony, debts for willful and malicious injuries to person or property, debts to governmental units for fines and penalties, debts for most government funded or guaranteed educational loans or subsidy overpayments, debts for personal injury caused by the debtor’s operation of a motor vehicle while intoxicated, debts owed to certain tariff-advantaged retirement plans, and debts for certain condominium or cooperative housing fees.

The types of debts described in sections 523(a)(2), (4) and(6) (obligations unnatural by fraud or maliciousness) are not automatically excepted from discharge. Creditors must question the court to determine that these debts are excepted from discharge. In the absence of an affirmative request by the creditor and the granting of the request by the court, the types of debts set out in sections 523(a)(2), (4) and (6) will be discharged.

A slightly broader discharge of debts is available to a debtor in a the boards 13 case than in a the boards 7 case. Debts dischargeable in a the boards 13, but not in the boards 7, include debts for willful and malicious injury to property, debts incurred to pay non-dischargeable tariff obligations, and debts arising from property settlements in split or separation proceedings. Although a the boards 13 debtor generally receives a discharge only after completing all payments required by the court-approved (i.e., “confirmed”) repayment plot, there are some limited circumstances under which the debtor may request the court to grant a “hardship discharge” even even if the debtor has failed to exact plot payments. Such a discharge is available only to a debtor whose failure to exact plot payments is due to circumstances beyond the debtor’s control. The scope of a the boards 13 “hardship discharge” is akin to that in a the boards 7 case with regard to the types of debts that are excepted from the discharge. A hardship discharge also is available in the boards 12 if the failure to exact plot payments is due to “circumstances for which the debtor should not justly be held accountable.”

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