The great majority of people that file bankruptcy in San Diego will discharge virtually all of their debts and will keep and retain all of their property. But it is understandable when people worry about whether their debts will be discharged.

We are bankruptcy attorneys in San Diego who have filed literally thousands of cases, so we’ve seen every imaginable issue or problem a debtor could have. And we’ve dealt with debt discharge problems as well as litigation over whether debts should be discharged. So let’s review some of the circumstances where some debts might not be discharged in your San Diego bankruptcy case and why that might happen.

The Bankruptcy Code provides some “exceptions” to discharge for types or categories of debts that our society has decided to protect or “except” from the normal bankruptcy discharge process for public policy reasons. Some of the most common types are:

  • Many tax claims, including income taxes (although it is possible to discharge older tax debts, so check with us for guidance on this category).
  • Debts for spousal or child support or alimony.
  • Student loan debts for most government funded or government guaranteed education loans (although there is a “hardship discharge” available for student loan debts).

These “exceptions” to discharge happen automatically, and these types of debts will remain due after bankruptcy without any separate action on the part of the creditor.

There a few other types or categories of debt that may not be dishargeable, but these types of debt will be discharged unless the creditor files an action in your bankruptcy case asking for an order of “nondischargeability” to apply to their specific debt. There is a specific time limit or “statute of limitations” that provides creditors a very short opportunity to file such an action in your case. If they fail to file such an action, they are barred from filing later and their debts are discharged just like all of your other debts. And if they do file such an action, you will have an opportunity to defend yourself before the court. So what are these types of debts? They are:

  • Where a debtor obtains money, property, services, credit or an extension of credit by fraud, false pretenses or misrepresentation.
  • Debts arising from fraud by a fiduciary (like a broker, trustee, lawyer, partner, etc.) or arising from embezzlement or larceny.
  • Debts arising from willful and malicious injury by the debtor to another person or their property (for example, personal or property damage arising from driving while intoxicated).

As stated above, creditors must ask the court to determine that these types of debts are excepted from discharge. In the absence of an affirmative request by the creditor and the granting of the request by the court, these types of debts are discharged.

Obviously, issues relating to whether your debts may be discharged must be discussed with a qualified bankruptcy lawyer who has extensive experience dealing with and resolving disputes of this type. We offer a free consultation and we will review your circumstances and help you resolve your doubts if any of these issues might affect you or your case.