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nondischargeable debt—student loans

Not all debts are discharged in bankruptcy. The debts discharged vary under each chapter of the Bankruptcy Code. Section 523(a) of the Bankruptcy 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 fact 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 chapter 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 tax 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 benefit overpayments

• debts for personal injury caused by the debtor's operation of a motor vehicle while intoxicated

• debts owed to certain tax-advantaged retirement plans

• debts for certain condominium or cooperative housing fees.

In Texas, as in all states, bankruptcy proceedings are governed by federal law, specifically the Bankruptcy Code. Under the Bankruptcy Code, certain debts are not dischargeable, meaning they cannot be eliminated through bankruptcy. These non-dischargeable debts are outlined in Section 523(a) and include various categories such as certain tax obligations, debts not listed by the debtor in bankruptcy documents, alimony and child support, debts from willful and malicious injuries, fines and penalties owed to government entities, student loans in many cases, debts from personal injury caused by DUI, and certain debts related to retirement plans and housing fees. The rationale for these exceptions is rooted in public policy considerations, often related to the nature of the debt or the debtor's behavior. While Chapters 7, 11, and 12 of the Bankruptcy Code have a broader list of non-dischargeable debts, Chapter 13 typically has a more limited list. These exceptions to discharge generally apply automatically without the need for creditors to take additional action, provided the circumstances fit the criteria established by Section 523(a).

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