Which Debts Can’t Be Discharged in Chapter 7 Bankruptcy?

Filing for Chapter 7 bankruptcy offers many individuals a way to eliminate overwhelming debt and start anew. However, while this process can provide significant financial relief, not all types of debts can be discharged. Understanding these limitations is essential before filing so you can make informed decisions about your financial future.

Sirody Bankruptcy Center has created this guide to help you clearly understand which debts are non-dischargeable under Chapter 7. With decades of experience guiding Maryland residents through both Chapter 7 and Chapter 13 bankruptcy, our attorneys are dedicated to helping you make informed choices and build a stronger, more stable financial future.

Secured vs. Unsecured Debt

Before diving into the types of debts that cannot be discharged, it’s important to distinguish between secured and unsecured debts. This distinction determines how your debt will be treated in a Chapter 7 bankruptcy.

Secured debts are tied to collateral—such as a home or car loan. If you default, the lender can seize the asset to recover losses. Even in bankruptcy, secured creditors maintain certain rights to repossess or foreclose on your property if payments are not maintained. While the personal obligation to pay may be discharged, the lien often remains, which means you could lose the asset if you can’t keep up with payments.

Unsecured debts, on the other hand, include credit cards, medical bills, and personal loans. These are not backed by collateral and are often fully dischargeable in Chapter 7. However, not all unsecured debts qualify for discharge. The bankruptcy court carefully evaluates whether a debt falls under specific exceptions outlined in the U.S. Bankruptcy Code.

Understanding this foundation helps you better evaluate what Chapter 7 can—and cannot—accomplish. It also highlights why consulting with an experienced bankruptcy attorney is critical for making an informed decision about your case.

Priority Debts: The Non-Dischargeable Obligations

Certain debts receive special treatment under the law because they serve vital public interests. These are known as priority debts, and they cannot be discharged in a Chapter 7 bankruptcy. Examples include certain tax obligations, domestic support payments, and government-related debts.

Taxes 

These are one of the most common priority debts. While some older income taxes may qualify for discharge, recent tax debts typically cannot. To be dischargeable, the tax must meet specific conditions—it must be income-based, at least three years old, and properly filed. Even then, penalties or fraudulent returns can make the debt ineligible.

Child Support and Alimony

Both of these are another major category of non-dischargeable debt. The bankruptcy court prioritizes these obligations to protect dependents who rely on that financial support. Even after a successful Chapter 7 discharge, you are still responsible for making these payments in full.

Court Fines, Penalties, and Restitution 

Debts that are related to criminal activity or civil infractions, like court fines, penalties, and restitution, remain fully enforceable. This ensures accountability and upholds the integrity of the legal system.

Because priority debts can’t be eliminated, understanding how they impact your overall financial picture is crucial before filing. A knowledgeable attorney can help you assess which obligations may survive bankruptcy and how to manage them effectively moving forward.

Student Loans: The Exception That’s Hard to Break

Student loan debt is among the most discussed—and misunderstood—categories when it comes to bankruptcy. Generally, student loans are not dischargeable in Chapter 7. The reasoning behind this is rooted in federal policy: lawmakers intended to preserve the stability of the student loan system by preventing widespread discharges.

However, there is a narrow path for relief under the “undue hardship” exception. To qualify, debtors must demonstrate that repaying the loan would cause undue hardship—a high standard that typically requires proving three elements known as the Brunner test:

1. You cannot maintain a minimal standard of living if forced to repay the loans.
2. The financial hardship is likely to persist for a significant portion of the repayment period.
3. You’ve made good faith efforts to repay the loans before filing.

While success in these cases is rare, recent court rulings and policy shifts have made discharges more achievable in certain circumstances, particularly for individuals with disabilities, low income, or long-term financial hardship.

If student loans represent a major portion of your debt burden, you will need to rely on the expertise of a bankruptcy attorney to determine whether you may qualify for undue hardship relief—or if a Chapter 13 repayment plan may be a better option for managing this type of debt.

Recent Credit Card Charges and Luxury Purchases

Credit card debt is typically dischargeable in Chapter 7, but there are important exceptions—especially when it comes to recent or luxury purchases. The bankruptcy system is designed to prevent abuse, and the court closely examines your spending behavior in the months leading up to your filing.

Under bankruptcy law, charges for luxury goods or services exceeding $800, as of 2025, made within 90 days of filing are presumed non-dischargeable. Similarly, cash advances exceeding $1,100 taken within 70 days of filing are also likely to be excluded. These presumptions protect creditors from last-minute spending sprees made in anticipation of bankruptcy.

However, these rules do not apply to ordinary living expenses such as groceries, utilities, or medical care. The court focuses on intent—if it appears that you made these purchases knowing you couldn’t repay them, they may be excluded from discharge.

Personal Injury and DUI-Related Debts

While personal injury claims can arise in many contexts, not all are treated equally in bankruptcy. Debts resulting from personal injury or death caused by driving under the influence (DUI) are not dischargeable in Chapter 7 bankruptcy.

This exception reflects the legal system’s commitment to holding individuals accountable for reckless behavior that causes harm to others. If you owe compensation as a result of a DUI-related accident, that obligation will remain even after bankruptcy. Similarly, court-ordered restitution stemming from criminal conduct is also non-dischargeable.

On the other hand, debts from ordinary negligence-based accidents, such as minor car crashes where alcohol was not involved, may be dischargeable depending on the circumstances. This distinction is important for anyone facing legal judgments or settlement obligations.

Understanding how personal injury-related debts are classified can make a significant difference in your financial recovery plan. 

Fraud, Misrepresentation, and Intentional Misconduct

The bankruptcy process is built on honesty and transparency. Consequently, debts arising from fraud, misrepresentation, or intentional wrongdoing cannot be discharged. These include any debts obtained through deceit, such as falsifying information on a credit application, embezzlement, or using another person’s identity for financial gain.

The bankruptcy court can deny discharge of these debts if the creditor proves that you intentionally misled them to obtain money, property, or credit. Similarly, debts arising from willful or malicious injury to another person or their property are also non-dischargeable.

Because allegations of fraud can carry serious legal and financial consequences, it’s vital to work with an attorney who can help ensure full compliance with bankruptcy disclosure requirements. 

Co-Signed and Joint Debts

When you share a debt with another person—such as a co-signed loan or joint credit card—the impact of bankruptcy can be complex. While Chapter 7 may discharge your personal obligation, it does not eliminate the responsibility of the other cosigner or joint account holder.

For example, if a parent co-signed a private student loan or a spouse jointly holds a credit card account, the creditor can still pursue the non-filing party for repayment. This can create financial and emotional strain between co-debtors if expectations aren’t clearly understood before filing.

In some cases, filing under Chapter 13 bankruptcy instead of Chapter 7 may provide better protection for co-signers. Chapter 13 includes a “co-debtor stay,” which temporarily prevents creditors from pursuing collection against co-signers while you’re in a repayment plan. This is another factor to take into consideration before you file for Chapter 7 bankruptcy. 

Protect Your Financial Future with Sirody Bankruptcy Center

While Chapter 7 bankruptcy offers powerful debt relief, it’s important to know that not every debt can be wiped away. Priority debts, student loans, recent luxury purchases, fraudulent obligations, and DUI-related damages are just a few examples of what typically remain. 

The complexity of debt discharge during a Chapter 7 bankruptcy can be simplified by partnering with Sirody Bankruptcy Center. Our team brings decades of experience in Maryland bankruptcy law, helping individuals and families regain control of their finances with clarity and confidence.

We take the time to evaluate your unique circumstances, identify which debts qualify for discharge, and craft a personalized strategy for lasting financial stability. If you’re struggling under the weight of unmanageable debt, don’t face the process alone. Contact Sirody Bankruptcy Center today for a consultation and learn how we can help you move toward a more secure financial future.