Nondischargeable Debts Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Nondischargeable Debts, written in plain English, along with examples of how it is used.

What is Nondischargeable Debts?

Debts that cannot be ereased,wil exist and has to be paid in cases of bankruptcy.

History and Meaning of Nondischargeable Debts

Nondischargeable debts are those obligations that cannot be eliminated after the bankruptcy process. These debts will remain owing and must be paid either in full or through a repayment plan. Such debts include alimony, child support, certain taxes, and student loans. Debts incurred as a result of fraudulent or illegal activity, as well as certain fines or penalties, generally cannot be discharged.

Nondischargeable debts began with the Bankruptcy Act of 1978. Before that date, all debts were dischargeable. Congress expanded the exempted debts list, but the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 took it even further.

Examples of Nondischargeable Debts

  1. Income taxes less than 3 years old
  2. Alimony and child support arrearages
  3. Debts for fines and penalties
  4. Education loans (unless the debtor can display undue hardship)
  5. Debts for drunken driving incidents

Legal Terms Similar to Nondischargeable Debts

  1. Secured debt: Secured debt is any debt that is guaranteed by collateral. Secured debtors have a legal claim on the underlying property if the borrower fails to repay them.
  2. Unsecured debt: Unsecured debt is any debt that does not have collateral, such as credit cards, medical bills, and personal loans.
  3. Liquidation bankruptcy: Liquidation bankruptcy is a type of bankruptcy where the debtor’s assets are sold, and the creditors are paid off with the profits.
  4. Chapter 13 bankruptcy: Chapter 13 bankruptcy is a type of bankruptcy where the debtor sets up a repayment plan with their creditors to repay their debts.
  5. Dischargeable debt: Dischargeable debt is any debt that can be eliminated through bankruptcy proceedings.