Most people arrive at a bankruptcy consultation with a mental ledger already drawn up. The credit cards go. The medical bills go. The student loans, they have heard, do not. Somewhere past that the ledger gets vague, and the vagueness is where the trouble lives, because the question that decides whether filing is worth doing is not how much debt a person has but what kind.
The Bankruptcy Code answers that question in a particular and slightly counterintuitive way. It does not give a list of dischargeable debts. It gives a list of everything else.
The default is that the debt goes away
Section 727 (b) of the Bankruptcy Code says that a chapter 7 discharge discharges the debtor “from all debts that arose before the date of the order for relief” — every one of them, whether or not the creditor filed a proof of claim, whether or not the claim was allowed. Then it adds four words that generate the entire remainder of this article: “Except as provided in section 523.”
So the structure is universal discharge minus an enumerated list. That matters practically, because it means a debt is not nondischargeable merely because it feels serious, or because the creditor is aggrieved, or because a collection letter says so. It is nondischargeable only if it fits a paragraph of 11 U.S.C. § 523 (a). Creditors say otherwise all the time. The statute is the statute.
The list, in the order a New Berlin client is likely to meet it
Taxes. Section 523 (a)(1) excepts taxes of the kind specified in § 507 (a)(3) or § 507 (a)(8) — which, for income taxes, is a set of look-back periods rather than a flat rule. Under § 507 (a)(8)(A)(i), an income tax gets priority, and therefore survives discharge, where the return was last due (including extensions) within three years before the petition; under (ii), where the tax was assessed within 240 days before the petition. An older income tax can be dischargeable. But § 523 (a)(1)(B) and (C) impose their own bars regardless of age: a tax for which no return was ever filed is never discharged, a tax for which the return was filed late and within two years before the petition is never discharged, and a tax on a fraudulent return or a willful evasion is never discharged. Do not read the converse into that second rule: a return filed late but longer ago raises a further question about whether it counts as a “return” for this purpose at all, and that is a question to put to a lawyer rather than to assume in your own favor. The upshot is that timing and filing history govern, and the analysis is arithmetic rather than intuition. It is worth doing properly; the difference between filing in one month and the next is sometimes the difference between a tax that dies and one that does not.
Debts obtained by fraud. Section 523 (a)(2)(A) covers money, property, services or credit obtained by “false pretenses, a false representation, or actual fraud.” Subparagraph (B) covers the written financial statement that was materially false, that the creditor reasonably relied on, and that the debtor caused to be published with intent to deceive.
Then subparagraph (C) sets two presumptions that catch ordinary people who have done nothing they would call fraud. Consumer debts to a single creditor aggregating more than $900 for luxury goods or services incurred within 90 days before the order for relief are presumed nondischargeable. Cash advances under an open-end credit plan aggregating more than $1,250 within 70 days before the order for relief are presumed nondischargeable. Those two figures are Judicial Conference adjustments under § 104 and are the amounts effective April 1, 2025; they are revised every three years, so check them rather than quoting them from memory. And note the definitional carve-out in § 523 (a)(2)(C)(ii)(II): “luxury goods or services” does not include goods or services reasonably necessary for the support or maintenance of the debtor or a dependent. Groceries on a card in a bad month are not luxury goods. A pre-filing spree is a different matter, and it is the reason a competent lawyer asks to see the last three months of statements before anything is filed.
Debts you forgot to list. Section 523 (a)(3) excepts a debt “neither listed nor scheduled” in time for the creditor to file a timely claim — unless the creditor had notice or actual knowledge of the case anyway. Schedules are not paperwork. An omitted creditor is a creditor who may still be collecting in 2031.
Fiduciary fraud, embezzlement, larceny. Section 523 (a)(4). Narrower than it sounds; “fiduciary capacity” is a term of art and not every trusted relationship qualifies.
Domestic support obligations. Section 523 (a)(5). Child support and maintenance survive every form of bankruptcy, full stop. Bankruptcy is not a strategy for a support arrearage, and a lawyer who suggests otherwise should be thanked and left.
Willful and malicious injury. Section 523 (a)(6) covers willful and malicious injury by the debtor “to another entity or to the property of another entity” — “entity” being the Code’s term, broad enough to reach people, businesses and governmental units alike. Both adjectives do work: negligence is not enough, and recklessness is generally not enough either.
Government fines and penalties. Section 523 (a)(7), to the extent the obligation is payable to and for the benefit of a governmental unit and is not compensation for actual pecuniary loss. The municipal fine survives; the restitution ordered to make a victim whole is handled elsewhere in the list.
Student loans. Section 523 (a)(8) excepts government-backed and nonprofit educational loans, educational benefit overpayments, scholarships and stipends, and private qualified education loans — unless excepting the debt “would impose an undue hardship on the debtor and the debtor’s dependents.” So the common statement that student loans “cannot be discharged in bankruptcy” is wrong as a matter of text. What is true is that the exception is written as an exception, that establishing it requires a separate adversary proceeding within the bankruptcy case, and that the standard is demanding. Whether a particular borrower can meet it is a question about that borrower’s circumstances, not a question with a general answer.
Drunk-driving injuries. Section 523 (a)(9) excepts a debt for death or personal injury caused by the debtor’s operation of a motor vehicle, vessel or aircraft while intoxicated. Note what it does not cover: property damage alone.
Criminal restitution. Section 523 (a)(13), for restitution issued under title 18 of the United States Code.
Divorce obligations that are not support. Section 523 (a)(15) excepts debts to a spouse, former spouse or child that are not domestic support obligations but were incurred in the course of a divorce or separation or in connection with a decree — the property-settlement equalizer, the hold-harmless clause on a joint card. In a chapter 7 those survive. Hold that thought.
Association dues. Section 523 (a)(16) excepts condominium, cooperative and homeowners-association fees that come due after the filing, for as long as the debtor still holds an ownership interest in the unit. Walking away from a condo without transferring title keeps the meter running.
Two structural points that matter more than the list
First: some exceptions are automatic and some have to be won.
Section 523 (c)(1) provides that the debtor is discharged from a debt of the kind specified in paragraphs (a)(2), (a)(4) and (a)(6) — the fraud, fiduciary and willful-injury categories — unless the creditor asks the court for a determination and the court agrees. Federal Rule of Bankruptcy Procedure 4007 (c) puts a hard clock on the asking: the complaint must be filed within 60 days after the first date set for the § 341 (a) meeting of creditors, with at least 30 days’ notice to creditors, and an extension may be sought only by a motion filed before the deadline runs. The Advisory Committee Note states the consequence in a single sentence: “If a complaint is not timely filed, the debt is discharged.”
Every other paragraph of § 523 (a) operates by force of law. No one has to object; support and recent taxes and student loans simply do not go away. The difference is worth understanding, because it tells a debtor which of the threats in a creditor’s letter actually requires a lawsuit and a deadline, and which is self-executing.
Second: the discharge kills the debt, not the lien.
Section 524 (a)(2) makes the discharge an injunction against collecting a discharged debt “as a personal liability of the debtor.” That phrase is the whole point. A mortgage or a car loan has two parts — a promise to pay and a lien on the property — and a discharge reaches the promise. The lien is an interest in the thing, and it rides through the case unless it is avoided, stripped, surrendered or paid under a plan. This is why a debtor can emerge from chapter 7 owing nobody anything and still lose the car: the deficiency claim is gone, and the car is gone too. What to do about secured collateral is a separate decision from discharge, and usually the more consequential one.
Chapter 13 discharges more than chapter 7 does
This is the part most summaries get wrong, and it is the single best argument for chapter 13 in the right case.
Section 1328 (a) grants a discharge when the debtor completes all plan payments, and it excepts a shorter list than § 523 (a). It incorporates § 507 (a)(8)(C) and paragraphs (1)(B), (1)(C), (2), (3), (4), (5), (8) and (9) of § 523 (a), then separately excepts long-term debts being cured under § 1322 (b)(5), restitution or a criminal fine included in a criminal sentence, and — under § 1328 (a)(4) — restitution or damages awarded in a civil action for willful or malicious injury that caused personal injury or death.
Read the list of what is missing. Paragraph (a)(6) — willful and malicious injury — is not there, so a judgment for willful damage to property can be discharged on a completed chapter 13 plan even though it would survive a chapter 7. Paragraph (a)(7) — government fines and penalties not compensating pecuniary loss — is not there either. Neither is paragraph (a)(15), the non-support divorce obligation, which means the property-settlement debt that survives a chapter 7 can be discharged in a completed chapter 13.
Two cautions. This narrower list applies only to a discharge under § 1328 (a), on completed payments. A hardship discharge under § 1328 (b), granted to a debtor who could not finish, excepts everything in § 523 (a) — the full list, the chapter 7 list. And the chapter 13 route means three to five years of plan payments rather than a few months. The broader discharge is bought, not given. Whether that trade makes sense is exactly the ground covered in our discussion of chapter 7 versus chapter 13 in Wisconsin.
Two ways to lose the discharge entirely
Everything above assumes a discharge is granted. It can be denied outright, and when it is, none of the debt goes away.
Conduct. Section 727 (a) directs the court to grant a discharge unless, among other things, the debtor transferred, concealed or destroyed property with intent to hinder, delay or defraud a creditor within a year before filing (§ 727 (a)(2)); concealed, destroyed or failed to keep financial records (§ 727 (a)(3)); knowingly and fraudulently made a false oath or account (§ 727 (a)(4)(A)); or failed to complete the personal financial management course described in § 111 (§ 727 (a)(11)). The first three are why the advice before a filing is always the same: do not move assets, do not pay one relative back ahead of the credit cards, and list everything. The fourth is why people who have done everything right sometimes still do not have a discharge — they skipped a two-hour online course.
Timing. A chapter 7 discharge is unavailable if the debtor received one under § 727 or § 1141 in a case commenced within eight years before the new petition (§ 727 (a)(8)), or under § 1228 or § 1328 within six years, unless plan payments in that case totaled 100 percent of allowed unsecured claims, or 70 percent under a plan proposed in good faith that was the debtor’s best effort (§ 727 (a)(9)). On the chapter 13 side, § 1328 (f) bars a discharge where the debtor received one in a chapter 7, 11 or 12 case filed within the preceding four years, or in a chapter 13 case filed within the preceding two. These clocks run from filing dates, not discharge dates, and getting them wrong costs a filing fee and a wasted case.
What this means before you file
The ledger a client brings to the first meeting is usually right about the big categories and wrong about the ones that decide the case. Credit cards, medical bills, personal loans, deficiency balances after a repossession, old utility accounts, most judgments: those go. Support, recent taxes, restitution and student loans generally do not. Between those poles sits a set of questions — how old is that tax return, when was that cash advance taken, is that divorce obligation support or property division, is anyone going to file an adversary proceeding in the sixty days after the meeting of creditors — where the answers change what a filing is worth and sometimes change which chapter to file.
Talk to a New Berlin bankruptcy attorney
Bankruptcy is not a machine that erases debt. It is a statute with a list, and the value of a filing depends on how much of a particular person’s debt falls outside that list.
Carson Law Office handles bankruptcy matters for clients throughout New Berlin, Waukesha County, Milwaukee, West Allis, Wauwatosa and the surrounding communities. If you want to know what a filing would and would not accomplish in your own case, call (262) 860-8932 or contact us here — and bring the tax returns and the last three months of statements.
This article provides general information about federal bankruptcy law as it applies to Wisconsin residents and is not legal advice. Reading it does not create an attorney-client relationship. The dollar figures in 11 U.S.C. § 523 (a)(2)(C) stated above are the amounts effective April 1, 2025, and are adjusted every three years; statutes, rules and case law change, and the dischargeability of any particular debt depends on the facts. For advice about your own situation, speak with a licensed Wisconsin attorney.