Chapter Thirteen. Objections to
Discharge and Dischargeability of Debts
 After reading this chapter, you will be able to:
 Understand that a discharge may not relieve a debtor
from all debts and that, in certain circumstances, a
debtor may be denied a discharge altogether.
 Describe which debts are automatically not
dischargeable
 Describe which debts are not dischargeable only if a
creditor obtains a judgment that the affected debt is not
dischargeable
 List those acts which can prevent a debtor’s discharge
altogether
 Understand the procedure for filing a complaint to
determine the dischargeability of a debt or the debtor’s
discharge.
Practice Pointer
 Even if the creditor takes no action, the
debtor will normally not be discharged of
most debts relating to taxes, domestic
support obligations, governmental fines or
penalties, and death or personal injury
caused by drunk driving.
Nondischargeable Debts
 A debt not subject to a debtor’s discharge.
 A debtor is not relieved from legal liability for
the affected debt.
 Some types of nondischargeable debts
require the filing of a Complaint to Determine
Dischargeability of Debt for the debt to
become nondischargeable.
 Nondischargeable debts are described in
Bankruptcy Code Section 523(a).
Nondischargeable Debts
 The following debts are nondischargeable without an
affected creditor being required to take any affirmative
action:
Priority tax claims
Unlisted debts
Domestic support obligations
Certain fines and penalties
Guaranteed student loans
Damages from DWI conviction
Debt nondischarged in prior
bankruptcy
Financial institution fraud
Restitution award
Loans obtained to pay
nondischargeable taxes
Postpetition homeowner’s
assessments
Prisoner court costs
Pension plan loans
Debts arising from federal or state
securities law violations
Complaint to Avoid
Dischargeability of a Debt
 An adversary proceeding initiated by a
creditor or debtor to determine the
dischargeability of a specific debt pursuant to
Bankruptcy Code Section 523(c).
 A creditor must initiate such a complaint
within 60 days of the date first set for the
creditors’ meeting.
 A debtor may initiate such a complaint at any
time.
 Time limitations are found int Fed. R. Bankr.
P. 4007
Complaint to Avoid Discharge
 An adversary proceeding initiated by a
trustee or an interested party to entirely avoid
a debtor’s discharge.
 Time limitations are found in Fed. R. Bankr.
P. 4004.
A Creditor May Object to Discharge of
the Following Debts
 Fraud
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Intentional fraud
False written financial statement
Limited prepetition credit transactions
 Defalcation, larceny, embezzlement
 Willful and malicious injury
Fresh Cash Rule
 The fresh cash rule covers the portion of a
debt incurred by use of a false written
financial statement.