Doney &
Associates
PLC

When a Liquidation Bankruptcy or Debt Adjustment case is completed, the court grants a discharge. It is the discharge that ends your obligation to pay the debt.

There are two ways that the court may limit the effect of the discharge. First, the court may discharge most debts, but order that you will still have to pay certain specific debts. Second, the court may deny the discharge to all debt so that you still have to pay everything.

The discharge granted in a Chapter 7 case does not discharge any of the following debt:

• Taxes.  Taxes will not be discharged if they meet any of the following parameters:
• Due within 3 years.  Taxes based on income or gross receipts for which a return (if required) was due within 3 years prior to the filing of the petition.  [�523(a)(1)(A)]  The date due includes any extensions, i.e., if the April 15 due date for income tax is extended to October 15 the later date will be used determining if the 3 year period has been passed.  [�507(a)(8)(A)(i)]  The 3 year period may be extended by any time in a bankruptcy plus an additional 6 months.    [�108(c), 26 USC 6503(h), IRC 6503(h)]
• Assessed within 240 days.  Taxes assessed within 240 days prior to the filing of the petition.  [�523(a)(1)(A)]  If an offer in compromise was pending, the 240 days will be extended by the days that it was pending, plus 30 days.  If a stay against collections was in effect under a prior bankruptcy, the 240 days will be extended for the time collection was stayed plus 90 days.  [�507(a)(8)(A)(ii)] 
• Returns not filed or filed within 2 years.  Taxes for which returns (if required) were not filed or were filed within 2 years of the filing of the petition.  [�727(b),  �523(a)(1)(B)(2)]
• Fraudulent returns and evaded taxes.  Taxes with respect to which the debtor made a fraudulent return or willfully attempted in any manner to evade or defeat such tax.  [�727(b),  �523(a)(1)(B)(3)]
• Tax penalties, fines, forfeitures.  Penalties for taxes not discharged (above), tax penalties regarding a transaction within 3 years of filing, and government fines and forfeitures are not discharged.  [�727(b)]  [�523(a)(7)] 
• Debt incurred to pay taxes not discharged (above).  [�727(b)]  [�523(a)(14), (14A))] 
• Debt obtained by fraud, false pretenses, or false financial statements.  Money, property, services, or an extension, renewal, or refinancing of credit obtained by (1) false pretenses, a false representation, or actual fraud, OR (2) a materially false written financial statement intended to deceive, on which the creditor relied. [�727(b)]  [�523(a)(2)]
• Debt incurred within 90 days before filing.  Consumer debt for luxury goods or services incurred within 90 days before filing of the petition, and totaling more than $to a single creditor.  [�727(b),  �523(a)(2)(C)(i)(I)]
• Cash advances within 70 days before filing.  Cash advances obtained within 70 days before filing of the petition, and which total more than $from all creditors.  [�727(b),  �523(a)(2)(C)(i)(II)]
• Debt not listed.  Debt not listed in time for the creditor to file a claim, or request a determination of discharge, unless the creditor had actual knowledge of the case.  [�727(b)]  [�523(a)(3)]
• Fraud, embezzlement, larceny. Debt for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny.  [�727(b)]  [�523(a)(4)]
• Domestic support obligations.  Includes child support and spousal maintenance.  [�727(b)]  [�523(a)(5)]
• For willful and malicious injury.  [�727(b)]  [�523(a)(6)]
• Educational loans.  Educational benefit overpayment or loan made, insured, or guaranteed by a governmental unit and other qualified educational loans are not discharged unless such exception from discharge would "impose an undue hardship on the debtor and the debtor's dependents."  [�727(b)]  [�523(a)(8)]  [�523(d)]
• For death or personal injury from DUI.  Includes operations of motor vehicle, vessel or aircraft and intoxication from alcohol, drug or other substance.  [�727(b)]  [�523(a)(9)]
• Debt from a previous bankruptcy where discharge was denied.  If a debtor was denied a discharge in a previous bankruptcy because the debtor transferred property, concealed records, made false statements, failed to explain losses, or disobeyed court orders, etc., debts which could have been listed in that bankruptcy will not be discharged.  [�727(b)]  [�523(a)(10)]
• Settlements, judgments, commitments regarding financial institutions.  Settlements and judgments regarding fraud or defalcation, or malicious or reckless failure to maintain commitments regarding certain financial institutions are not discharged.  [�727(b)]  [�523(a)(11), (12)]
• Restitution.  Payments under orders of criminal restitution are not discharged.  [�727(b)]  [�523(a)(13)]
• Fines & penalties imposed under Federal election law.  [�727(b)]  [�523(a)(14B)]
• Debt from a divorce or separation.  Debt other than support, owed to a spouse, former spouse, or child under a divorce decree, order, or separation agreement is not discharged.  [�727(b)]  [�523(a)(15)]
  Note:  A decree or agreement which obligates the debtor to pay all debt could result in no debt being discharged under a bankruptcy.
• Homeowners association fees and assessments.  Such fees and assessments arising after the filing of a bankruptcy are not discharged.  [�727(b)]  [�523(a)(16)]
• Fees and cost imposed on prisoners by courts for filing cases, motions, complaints, or appeals.  [�727(b)]  [�523(a)(17)]
• Loans from pension, profit-sharing, and stock bonus plans.  [�727(b)]  [�523(a)(18)]
• Federal and state securities laws violations, settlements, and securities fraud, deceit and manipulation.  [�727(b)]  [�523(a)(19)]

The discharge granted in a Chapter 13 case does not discharge any of the following debt:

• Debt which is neither provided for in the plan nor on which creditors claims have been disallowed.  [�1328(a)]
• Debt for which the plan provides for a curing of a default and maintenance of payments where the last payment is due after the final plan payment. [�1328(a)(1),  �1322(b)(5)]
• Certain taxes, including: [�1328(a)(2)]
• Taxes which the debtor is required to collected or withhold.  [�1328(a)(2), [�507(a)(8)(C)]
• Taxes on which returns were not filed, or were filed after two years before the date of the filing of the petition.  [�1328(a)(2), �523(a)(1)(B)]
• Taxes with respect to which the debtor made a fraudulent return or willfully attempted to evade or defeat.   [�1328(a)(2), �523(a)(1)(C)]
• For money, property, services, or extension, refinancing or renewal of credit obtained by false pretenses, a false representation, or actual fraud, or by a false writing meeting certain requirements.  [�1328(a)(2), �523(a)(2)]
• Certain consumer debt incurred within 90 days before filing, and certain cash advances obtained within 70 days before filing.  [�1328(a)(2), �523(a)(2)]
• Debt which is not listed.  [�1328(a)(2), �523(a)(3)]
• Debt for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny.  [�1328(a)(2), �523(a)(4)]
• Debt from a domestic support obligation.  [�1328(a)(2), �523(a)(5)]
• Educational loan, benefit, or overpayment.  [�1328(a)(2), �523(a)(8)]
• Debt for death or personal injury caused by the debtor's operation of a motor vehicle, vessel, or aircraft if such operation was unlawful because the debtor was intoxicated from using alcohol, a drug, or another substance.  [�1328(a)(2), �523(a)(9)]
• Debt for restitution, or a criminal fine, included in a sentence on the debtor's conviction of a crime.  [�1328(a)(3)]
• Debt for restitution, or damages, awarded in a civil action against the debtor as a result of willful or malicious injury by the debtor that caused personal injury to an individual or the death of an individual.   [�1328(a)(3)]
• Certain debt arising after the commencement of the case if prior approval was practicable and was not obtained.  [�1328(d)]

The court will grant a discharge if the debtor meets all of the following requirements:

• The debtor has completed an approved Financial Management Course.  [�727(a)(11), �111(d)]
• The debtor has not committed any of the following acts, either (1) in connection with his or her bankruptcy or (2) regarding another case concerning an insider within one year before the filing of the petition or during the case.  [�727(a)(7)]
• Transferred, removed, destroyed, mutilated, or concealed property within a year before the filing of the case, or during the case, with the intent to hinder, delay, or defraud a creditor or the trustee. [�727(a)(2)]
• Concealed, destroyed, mutilated, falsified, or failed to keep or preserve certain financial records.   [�727(a)(3)]
• Knowingly and fraudulently made a false oath, made a false claim, offered or received money for acting or not acting, or withheld certain information.    [�727(a)(4)]
• Failed to satisfactorily explain a loss or deficiency in assets.  [�727(a)(5)]
• Refused to obey a court order or testify (except under privilege against self incrimination where immunity was not granted).  [�727(a)(6)]
• The debtor has not received a discharge under Chapter 7 or 11 in a case commenced within 8 years before the filing of the petition in this case.  [�727(a)(8)]
• The debtor has not received a discharge under Chapter 12 or 13 in a case commenced within 6 years before the filing of the petition in this case.  This exception to discharge does not apply if at least 70% of all unsecured claims were paid in the Chapter 12 or 13 case.  (If less than 100% of such claims are paid, plan must also been proposed in good faith and have been the debtor's best efforts.)  [�727(a)(9)]
• The debtor has not waived the discharge (in writing, after the discharge, and approved by the court).  [�727(a)(10)]
• The debtor has not been convicted of or have pending proceedings concerning a felony, which demonstrates that the filing of the case was an abuse of the bankruptcy code.  [�727(a)(12)]
• The debtor not owe any debt arising from:  [�727(a)(12)]
• A violation of Federal or State securities laws or regulations.  [�522(q)(1)(B)(i)]
• Fraud, deceit, or manipulation in a fiduciary capacity or in connection with the purchase or sale of any registered security.  [�522(q)(1)(B)(ii)]
• Any civil remedy for racketeering.  [�522(q)(1)(B)(iii)]
• Any criminal act, intentional tort, or willful or reckless misconduct that caused serious physical injury or death to another individual in the preceding 5 years.  [�522(q)(1)(B)(iv)]
• Even if a discharge has been granted, the discharge may be revoked if:
• The discharge was obtained through the fraud of the debtor.  [�727(d)(1)]
• The debtor acquired or became entitled to property which would be property of the estate, and failed to report, deliver or surrender such property to the trustee.  [�727(d)(2)]
• The debtor refused to obey a court order or testify (except under privilege against self incrimination where immunity was not granted).  [�727(d)(3), �727(a)(6)]
• The debtor failed to satisfactorily explain a material misstatement or a failure to make documents available in a U.S. Trustee audit.  [�727(d)(4)]

The court will grant a discharge if the debtor meets all of the following requirements:

• The debtor has completed the plan payments.  [�1328(a)]
• The debtor has paid all domestic support obligations (generally, court ordered or legally required child support and/or spousal maintenance) which accrued after the petition was filed, or which were provided for by the plan. The  debtor must certify that the required amounts have been paid.  [�1328(a)]
• The debtor has completed an approved Financial Management Course.  [�1328(g), �111(d)]
• The debtor has not received a discharge in a Chapter 7, 11, or 12 case filed within 4 years prior to the commencement of this Chapter 13.  [�1328(f)(1)]
• The debtor has not received a discharge in a prior Chapter 13 case filed within 2 years prior to the commencement of this Chapter 13.  [�1328(f)(2)]
• The court has found, after notice and a hearing held no more than 10 days before the granting of a discharge, that there is no reasonable cause to believe that any of the following apply:
• The debtor has attempted to exempt an interest in a homestead or burial plot in excess of $125,000, and the debtor has been convicted of a felony which demonstrates that the filing of the case was an abuse of the Bankruptcy code, or there is a pending proceeding in which the debtor may be found guilty of such a felony.  [�1328(h), �522(q)(1)(A)]
• The debtor owes any debt arising from, or there is a pending proceeding in which the debtor may be found liable for debt arising from:  [�1328(h)]
• any violation of the Federal securities laws, [�1328(h), �522(q)(1)(B)(1)]
• fraud, deceit, or manipulation in a fiduciary capacity or in connection with the purchase or sale of a registered security, [�1328(h), �522(q)(1)(B)(2)]
• any civil remedy under section1964 of title 18, or [�1328(h), �522(q)(1)(B)(3)]
• any criminal act, intentional tort, or willful or reckless misconduct that caused serious physical injury or death to another individual in the preceding 5 years. [�1328(h), �522(q)(1)(B)(4)]
• The debtor has not obtained the discharge through fraud.  A party in interest has one year after the discharge in which to request a hearing to revoke the discharge.  [�1328(e)]