Filing a Chapter 13 or a Chapter 7 bankruptcy in North Carolina can help substantially when you need a fresh start. Generally speaking, bankruptcy allows for the discharge of many debts, but some obligations remain even after the process is complete.

However, there are some debts you will remain on the hook for even after bankruptcy, and filing bankruptcy is the first step in determining which debts can be discharged and which cannot.

Understanding the basic rules can help you as you make your decisions. A bankruptcy proceeding is the legal process through which debts are addressed, creditors are notified, and the court determines which debts are eligible for discharge.

Ultimately, talking to an experienced attorney about your circumstances is the best way to get the guidance that will work best for you. A bankruptcy discharge is a court order that releases you from personal liability for certain debts, providing permanent relief from those obligations.

Debts you owe because of a court order or judgment

Debts that neither a Chapter 7 nor a Chapter 13 will discharge include child support, alimony, most taxes, most types of student loans, court fines, criminal fines and penalties, cooperative housing fees, and personal injury judgments against you.

A Chapter 7 bankruptcy will generally not affect these debts; a Chapter 13 will need to provide for full repayment in its plan, or you will remain responsible for whatever remains after your plan’s completion.

Additionally, debts resulting from the debtor’s drunken driving or the debtor’s operation of a motor vehicle while intoxicated are also non-dischargeable.

Debts you leave out of your petition

If you fail to list any debts owed at the appropriate juncture during your bankruptcy petition, you may also remain liable for those debts. In addition, other debts not included in the petition may also remain enforceable.

In addition, you will need to keep paying secured debts such as mortgages or car loans if you want to keep the property.

Debts whose discharge a creditor objects to

In a Chapter 7, a creditor can contest your petition to discharge particular debts. There is a date set, known as the first date, for the 341 meeting of creditors, which is important because it determines the deadlines for filing objections to discharge.

In some cases, a bankruptcy judge decides whether certain debts are nondischargeable, and judges tend to side with the creditor and let the debt stand. These include debts incurred as a result of committing a crime such as fraud, embezzlement or other theft crimes, as well as nondischargeable debts.

Debts discharged vary depending on the chapter of bankruptcy filed and whether the case involves individual debtors.

This category also includes debts you may owe as a result of willful property damage or injury or breach of trust. Further, creditors may also object to the discharge of debts for loans, cash advances or credit purchases of luxury goods or services of more than $1,150 within 60 days of the bankruptcy filing, as well as debts related to tax advantaged retirement plans.

Unlike non-dischargeable debts, most unsecured debt such as credit card balances and medical bills can typically be discharged in bankruptcy.

Discharge Order: What It Means for Non-Dischargeable Debts

Getting a discharge order is one of the most important moments you’ll experience in your bankruptcy case—it’s when the court officially releases you from personal liability for most of the debts you included in your bankruptcy filing.

But here’s the thing: not all of your debts will disappear. Some debts, called non-dischargeable debts, will stick around even after your bankruptcy case wraps up, and you’ll still be on the hook for them.

When you file for bankruptcy, the bankruptcy court will issue your discharge order once you’ve met all the requirements of the bankruptcy process. This order tells your creditors they can’t come after you anymore for the debts that got wiped out in your bankruptcy.

If you’re an honest person who just hit some tough times, this gives you the fresh start you desperately need. However, bankruptcy law specifically carves out certain debts from discharge, which means creditors can still chase you down for these obligations even after your case is closed.

Non-dischargeable debts cover a bunch of obligations that bankruptcy law considers too important or too tied to bad behavior to let you off the hook. For instance, if you owe domestic support like child support payments or alimony, those debts automatically survive your bankruptcy.

The same goes for most tax debts, debts you racked up by willfully and maliciously hurting someone or damaging their property, and debts you got through fraud or lying. Your student loans are also generally going to stick around unless you can prove undue hardship to the court, which is a really tough standard to meet.

Your bankruptcy court has a big say in figuring out which of your debts can’t be discharged. Sometimes, one of your creditors might start what’s called an adversary proceeding to challenge whether a specific debt should be wiped out—like debts from breaching your fiduciary duty or personal injury you caused while driving drunk.

The court will look at what happened, including whether you incurred the debt through willful and malicious acts, and make a decision based on the facts and bankruptcy law.

You should know that not all debts automatically survive bankruptcy. Things like your medical bills, credit card purchases, and personal loans typically get discharged unless a creditor can prove you got them fraudulently.

On the flip side, debts like certain taxes, criminal restitution, and debts from malicious injury are generally going to remain on your plate even after your bankruptcy case closes.

Understanding which debts will disappear and which ones will remain is crucial for planning your financial future after bankruptcy. A bankruptcy attorney can be incredibly valuable throughout your bankruptcy process, helping you navigate the complicated world of bankruptcy law and making sure all your eligible debts get included in your bankruptcy petition.

If you forget to list a debt or if a debt turns out to be non-dischargeable, you’ll remain liable for that obligation even after you get your discharge order.

In summary, while your discharge order offers significant relief by eliminating many of your unsecured debts, certain debts—like child support, some tax debts, and debts from willful and malicious injury—will survive your bankruptcy.

By working closely with a qualified bankruptcy attorney, you can better understand what you’ll still owe, protect your rights, and take real steps toward getting your finances back on track after your bankruptcy process is complete.

Make sure to get the right information

If you have concerns about particular debts, be sure to discuss the issue with your attorney. In Chapter 13 bankruptcy, the repayment plan and the debtor’s plan are crucial, as they outline how debts will be repaid and determine eligibility for discharge.

Do not give up hope and assume there is nothing you can do. In some cases, it may be possible to work out payment plans or get some other type of relief.

Once the debtor completes all required payments under the debtor’s plan, a discharge may be granted. However, in certain circumstances, a court may revoke a discharge if there is evidence of fraud or misconduct.