non-dischargeable debt
Debt that cannot be eliminated in bankruptcy — including most student loans, child support, and recent tax debts.
Example
“She discovered her $60,000 in student loans was non-dischargeable in bankruptcy.”
Memory Tip
NON-DISCHARGEABLE — bankruptcy cannot erase these debts. They follow you through.
Why It Matters
Understanding non-dischargeable debt is crucial because it means certain obligations will follow you even if you file for bankruptcy protection. This affects your long-term financial planning and should influence decisions about whether bankruptcy is a viable option for your situation.
Common Misconception
Many people believe that filing for bankruptcy will eliminate all their debts, but non-dischargeable debts like student loans and child support remain your legal responsibility even after bankruptcy is discharged. This false assumption has led many people to pursue bankruptcy only to discover they still owe thousands in student loans afterward.
In Practice
Consider someone with 50000 dollars in credit card debt, 80000 dollars in student loans, and 15000 dollars in unpaid child support who files for Chapter 7 bankruptcy. The credit card debt may be eliminated, but they will still legally owe the 80000 dollars in student loans and the 15000 dollars in child support after the bankruptcy process concludes.
Etymology
From Latin 'non' meaning not plus Old French 'deschargier' meaning to unload.
Common Misspellings
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Related Terms
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See Also
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