One of the main reasons to file bankruptcy is to discharge debt. When a debt is discharged it cannot be collected by a creditor. The debtor is no longer liable for the debt. However, not all debts can be discharged in bankruptcy. The three most common nondischargeable debts are domestic support obligations, student loans, and taxes.
A domestic support obligation is any money owed as a result of a divorce decree or child support order. Domestic support obligations can be tricky though. Creditors don’t generally enforce nondischargeability of debts listed in a divorce decree. If a debt is listed in the bankruptcy schedules the creditor will not try to collect the debt. However, if the creditor attempts to collect the debt from the spouse who did not file bankruptcy even when the bankrupt party is ordered to pay the debt in the divorce decree, the non-filing party will have a right to be indemnified for the damage done to their credit and the costs associated with collection.
Student loans are also not dischargeable. This rule applies to all federally guaranteed student loans. There is an exception to this rule for people that will experience hardship as a result of repaying the student loans but this is a very difficult burden to meet in court. Income taxes cannot be discharged in Chapter 13 bankruptcy but sometimes they can be discharged in Chapter 7 bankruptcy, depending on when the tax debt was incurred and when the tax return was filed. There are several other less common types of nondischargeable debts, such as criminal fines and debts that are the result of fraud.