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Procedure for Preserving Non-Dischargeable Debts

1. Automatic Non-Discharge. Most of the non-dischargeable debts discussed above are automatically not discharged. This means that the entry of a discharge order will not release any debt of the type that are automatically not dischargeable, and the creditor does not need to file a lawsuit or take any other action to preserve the debt. The following types of non-dischargeable debts are automatically excepted from discharge:

► child support (see Child Support and Alimony and Related Attorney’s Fees);

► debts incurred to pay non-dischargeable taxes (see Debts Incurred to Pay Non-Dischargeable Federal Taxes);

► divorce decree debts (see Divorce Decree Debts);

► drunk drivers causing death or injury (see Drunk Drivers Causing Death or Injury);

► fines, penalties and criminal restitution (see Fines, Penalties & Criminal Restitution);

► securities fraud or securities law violations (see Securities Fraud or Securities Law Violations).

► student loans (see Student Loans);

► tax claims (see Discharging Tax Claims in Bankruptcy);

► unlisted debts (see Unlisted Creditors); and

► willful and malicious injury to another person – Chapter 13 cases only (see Willful and Malicious Injury to Persons or Property).

2. Discharge Contest Required. The creditor must file a discharge contest (a lawsuit) in bankruptcy court to preserve the following types of non-dischargeable debts:

► fraud claims (see Fraud Claims);

► theft, conversion or breach of fiduciary duty (see Embezzlement, Theft or Breach of Fiduciary Duty); and

► willful and malicious injury to another person or property – Chapter 7 cases only (see Willful Injury to Persons or Property).

The creditor must prove that the debt falls within one of these three categories of non-dischargeable debts. The creditor must file the discharge contest within 60 days after the creditor’s meeting was first scheduled to take place. If the creditor fails to file the discharge contest within the 60 day time period, his right to contest the discharge will expire and the debt will be released.