Debts Bankruptcy Usually Cannot Erase In short: Bankruptcy can wipe out many consumer debts, but it does not erase everything. Debts that usually survive include most student loans, child support and alimony, many tax debts, criminal fines, and debts tied to fraud or willful injury if a creditor successfully challenges them. Secured loans on a house or car also stay in play if you want to keep the property. Call (215) 774-3916 for a free consultation with Cibik Law, P.C. Philadelphia residents often hear that bankruptcy is a “fresh start.” That is true for many credit cards, medical bills, and personal loans. It is not true for every balance on your credit report. Walking into a consultation with the wrong list wastes time and creates false hope. This guide is the counterpart to our post on what debts can be discharged in a Philadelphia bankruptcy case. Read both. Then bring statements so we can map your debts—not a generic internet list. Every case is different. Timing, recent charges, tax years, support arrears, and pending lawsuits can change the result. This is general information for Pennsylvania consumers, not legal advice. What “cannot erase” actually means A bankruptcy discharge is a court order that releases you from personal liability on qualifying debts. Debts that are nondischargeable generally remain collectible after the case ends. Some are automatically excepted from discharge. Others become nondischargeable only if a creditor files a timely challenge and wins. Two more distinctions matter: Personal liability vs. the lien. Even when a discharge affects what you personally owe, a mortgage or car lien can survive. Keeping the house or car usually means you keep paying. The automatic stay is temporary. Filing can pause collection through the automatic stay. When the stay ends, creditors on surviving debts can often resume collection unless you have another plan. Chapter 7 and Chapter 13 treat some of these categories differently. Compare options in Chapter 7 vs Chapter 13 in Pennsylvania. Most student loans Federal and most private student loans are the category people ask about first. In a typical consumer case, student loans are not wiped out by the discharge. They usually remain after Chapter 7. In Chapter 13 they may receive a payment through the plan, but the remaining balance often survives after the plan ends unless you separately prove a hardship exception. That does not mean bankruptcy is useless if you have student loans. Filing can still discharge credit cards, medical bills, and other qualifying unsecured debt so more of your budget can go to loans you cannot erase. It can also stop other collection while the case is pending. The undue hardship exception There is a narrow path to discharge student loans: proving undue hardship in a separate court proceeding (an adversary proceeding), not just by listing the loans on your bankruptcy petition. Courts apply a demanding standard. The result depends on income, expenses, loan type, repayment history, and whether repayment would impose an undue hardship. Do not assume your loans will be erased because repayment feels impossible. Bring loan servicer names, balances, and any income-driven repayment paperwork to the consult so we can talk about realistic options—bankruptcy plus repayment, not bankruptcy as a magic wand. Child support and alimony Domestic support obligations—child support and alimony / spousal support—are generally not dischargeable. That includes many arrears. Bankruptcy does not cancel the duty to support children or a former spouse. What bankruptcy can still do is stop other creditors so support can stay current, and in some Chapter 13 cases it can provide a structured way to catch up on certain arrears while the stay is in place. Support creditors have special priority. Ignoring a support order because you filed is a serious mistake. If you have a domestic relations case in Philadelphia or a suburban county, bring the order, the arrears statement, and any wage-attachment paperwork. We need those numbers before we can say what a filing would actually change. Many tax debts Tax debt is the category people get wrong most often. Some older income taxes can be dischargeable if they meet a stack of timing and filing rules. Many other tax debts are not: Recent income taxes that do not meet the look-back and filing tests Many payroll / trust-fund taxes Some penalties and interest tied to nondischargeable tax Taxes for years where a required return was not properly filed The IRS and Pennsylvania Department of Revenue do not treat “I filed bankruptcy” as a free pass. Liens can survive even when personal liability is affected. A Chapter 13 plan is often used to pay priority tax over time while other unsecured debt is reduced. Older income taxes that sometimes qualify Discharge of older income tax is possible in some cases, but only if the return was filed, the assessment is old enough, and other technical rules are met. Guessing from a tax-year number on a collection letter is how people get surprised after discharge. Bring transcripts or notices—not just a memory of “I think that year is old enough.” If a tax lawsuit, levy, or wage attachment is already in motion, say so at the start of the consult. The stay can pause many tax collection actions while we sort which years are priority, which might be dischargeable, and which need to be paid through a plan. Fraud, willful injury, criminal fines, and similar debts Some debts survive because of how they arose, not because of the account type: Fraud, false pretenses, or embezzlement — if a creditor timely objects and the court agrees, that debt can be excepted from discharge Willful and malicious injury — intentional harm findings are treated differently from ordinary negligence or accident-related medical bills Criminal fines, restitution, and many government penalties — generally not wiped out like a credit card Recent luxury charges or cash advances close to filing — can draw a challenge even on an otherwise ordinary card Ordinary medical bills and credit cards are usually dischargeable. A judgment is not automatically safe just because it is a “judgment.” If the judgment is based on fraud, support, or a criminal fine, it may survive. If it is based on an ordinary unpaid bill, it may still be dischargeable—see the 4A list. Why a creditor challenge changes everything Some exceptions are automatic. Others require the creditor to file an adversary proceeding by a deadline. Silence from a credit-card bank is common. A private lender alleging fraud is a different case. Do not hide recent large charges, cash advances, or transfers. Honesty on the schedules is part of the fresh start; concealment is how cases get expensive. Secured loans if you want to keep the house or car A mortgage or car loan is secured. Bankruptcy can stop foreclosure or repossession for a time through the stay. Chapter 13 can help you catch up on missed mortgage payments. Chapter 7 may pause a sale but usually does not cure arrears by itself. If you want to keep the property, you generally must keep paying the loan (or catch up through a plan). Discharging personal liability without dealing with the lien is not the same as keeping the house or car for free. If a sale date is already set, read can bankruptcy stop foreclosure in Philadelphia and call with that date. Chapter 7 vs Chapter 13 — which debts still survive The nondischargeable list is similar in both chapters, but the strategy changes: Chapter 7 — faster discharge of qualifying unsecured debt; surviving debts (support, most student loans, many taxes, successful fraud findings) remain after the case Chapter 13 — three-to-five-year plan can pay priority items such as certain taxes and support arrears while other unsecured debt is reduced; some debts that survive Chapter 7 still must be addressed in the plan People sometimes file Chapter 7 hoping student loans or recent taxes will vanish. They usually do not. The better question is whether wiping out the dischargeable pile makes the surviving pile manageable. That is a numbers conversation, not a slogan. If a collector already sued, the stay may pause that case. A rising volume of collection suits is one reason Philadelphia families are looking at filing now—see our note on debt collection lawsuits in Philadelphia. A lawsuit does not automatically make the debt nondischargeable. What to bring so we can spot debts that will survive A useful consultation is a debt inventory. Bring: Student loan servicer names and balances (federal and private) Support orders and arrears statements IRS / state tax notices, transcripts, or levy letters Lawsuit, judgment, or criminal-fine paperwork Mortgage and car loan statements if you want to keep the property Credit card and medical statements (the debts that often can be erased) Recent pay stubs and last two tax returns Full checklist: what to bring to your first bankruptcy consultation in Philadelphia. How Cibik Law helps Philadelphia families sort debts that survive Cibik Law, P.C. focuses on consumer bankruptcy for Philadelphia and the surrounding counties. The job is to separate the debts that can realistically be discharged from the debts that will still be there after the case—and to choose Chapter 7 or Chapter 13 based on those numbers, not on a blog post. Free consultation: (215) 774-3916. Offices in Philadelphia and King of Prussia. General information only—not legal advice. Every case is different. Frequently Asked Questions Does bankruptcy erase student loans in Pennsylvania? Usually no. Most student loans survive a typical consumer bankruptcy. A separate undue-hardship proceeding is required to seek a student-loan discharge, and that standard is demanding. Can bankruptcy wipe out child support or alimony? Generally no. Child support and alimony are domestic support obligations and are not discharged like credit cards. Some Chapter 13 cases can help organize arrears while other debts are reduced. Are tax debts discharged in bankruptcy? Sometimes older income taxes can be, if strict timing and filing rules are met. Many recent taxes, unfiled-year taxes, and payroll/trust-fund taxes are not. Bring notices—do not guess from the year alone. If I keep my house or car, does bankruptcy erase the loan? Not if you want to keep the property. The lien usually survives. You generally must keep paying or catch up through a Chapter 13 plan. Do criminal fines go away in Chapter 7? Most criminal fines, restitution, and similar government penalties are not wiped out the way ordinary consumer debt is. Bring the sentencing or collection paperwork to the consult.