11 U.S. Code § 523 - Exceptions to discharge | U.S. Code | US Law

11 U.S. Code § 523 – Exceptions to discharge | U.S. Code | US Law

Historical and Revision Notes

legislative statements

Section 523(a)(1) represents a compromise between the place taken within the House invoice and the Senate modification. Section 523(a)(2) likewise represents a compromise between the place taken within the House invoice and the Senate modification with respect to the false monetary assertion exception to discharge. In order to make clear {that a} “renewal of credit” features a “refinancing of credit”, express reference to a refinancing of credit is made within the preamble to part 523(a)(2). A renewal of credit or refinancing of credit that was obtained by a false monetary assertion inside the phrases of part 523(a)(2) is nondischargeable. However, every of the provisions of part 523(a)(2) have to be proved. Thus, beneath part 523(a)(2)(A) a creditor should show that the debt was obtained by false pretenses, a false illustration, or precise fraud, apart from a press release respecting the debtor’s or an insider’s monetary situation. Subparagraph (A) is meant to codify present case legislation e.g., Neal v. Clark, 95 U.S. 704 (1887) [24 L. Ed. 586], which interprets “fraud” to imply precise or constructive fraud relatively than fraud implied in legislation. Subparagraph (A) is mutually unique from subparagraph (B). Subparagraph (B) pertains to the so-called false monetary assertion. In order for the debt to be nondischargeable, the creditor should show that the debt was obtained by means of a press release in writing (i) that’s materially false; (ii) respecting the debtor’s or an insider’s monetary situation; (iii) on which the creditor to whom the debtor is responsible for acquiring cash, property, companies, or credit fairly relied; (iv) that the debtor precipitated to be made or printed with intent to deceive. Section 523(a)(2)(B)(iv) isn’t supposed to vary from current legislation because the assertion that the debtor causes to be made or printed with the intent to deceive mechanically features a assertion that the debtor really makes or publishes with an intent to deceive. Section 523(a)(2)(B) is defined within the House report. Under part 523(a)(2)(B)(i) a discharge is barred solely as to that portion of a loan with respect to which a false monetary assertion is materially false.

In many instances, a creditor is required by state legislation to refinance current credit on which there was no default. If the creditor doesn’t forfeit treatments or in any other case rely to his detriment on a false monetary assertion with respect to current credit, then an extension, renewal, or refinancing of such credit is nondischargeable solely to the extent of the brand new cash superior; alternatively, if an current loan is in default or the creditor in any other case fairly depends to his detriment on a false monetary assertion with regard to an current loan, then your entire debt is nondischarge­ready beneath part 523(a)(2)(B). This codifies the reasoning expressed by the second circuit in In re Danns, 558 F.second 114 (second Cir. 1977).

Section 523(a)(3) of the House modification is derived from the Senate modification. The provision is meant to overrule Birkett v. Columbia Bank, 195 U.S. 345 (1904) [25 S.Ct. 38, 49 L.Ed. 231, 12 Am.Bankr.Rep. 691].

Section 523(a)(4) of the House modification represents a compromise between the House invoice and the Senate modification.

Section 523(a)(5) is a compromise between the House invoice and the Senate modification. The provision excepts from discharge a debt owed to a partner, former partner or youngster of the debtor, in reference to a separation settlement, divorce decree, or property settlement settlement, for alimony to, upkeep for, or help of such partner or youngster however to not the extent that the debt is assigned to a different entity. If the debtor has assumed an obligation of the debtor’s partner to a 3rd celebration in reference to a separation settlement, property settlement settlement, or divorce continuing, such debt is dischargeable to the extent that fee of the debt by the debtor isn’t really within the nature of alimony, upkeep, or help of debtor’s partner, former partner, or youngster.

Section 523(a)(6) adopts the place taken within the House invoice and rejects the choice steered within the Senate modification. The phrase “willful and malicious injury” covers a willful and malicious conversion.

Section 523(a)(7) of the House modification adopts the place taken within the Senate modification and rejects the place taken within the House invoice. A penalty referring to a tax can’t be nondischargeable except the tax itself is nondischargeable.

Section 523(a)(8) represents a compromise between the House invoice and the Senate modification relating to instructional loans. This provision is broader than present legislation which is restricted to federally insured loans. Only instructional loans owing to a governmental unit or a nonprofit establishment of upper schooling are made nondischargeable beneath this paragraph.

Section 523(b) is new. The part represents a modification of comparable provisions contained within the House invoice and the Senate modification.

Section 523(c) of the House modification adopts the place taken within the Senate modification.

Section 523(d) represents a compromise between the place taken within the House invoice and the Senate modification on the difficulty of attorneys’ charges in false monetary assertion complaints to find out dischargeability. The provision contained within the House invoice allowing the court docket to award damages is eradicated. The court docket should grant the debtor judgment or an inexpensive attorneys’ price except the granting of judgment could be clearly inequitable.

Nondischargeable money owed: The House modification retains the essential classes of nondischargeable tax liabilities contained in each payments, however restricts the cut-off dates on sure nondischargeable taxes. Under the modification, nondischargeable taxes cowl taxes entitled to precedence beneath part 507(a)(6) of title 11 and, within the case of particular person debtors beneath chapters 7, 11, or 13, tax liabilities with respect to which no required return had been filed or as to which a late return had been filed if the return grew to become final due, together with extensions, inside 2 years earlier than the date of the petition or grew to become due after the petition or as to which the debtor made a fraudulent return, entry or bill or fraudulently tried to evade or defeat the tax.

In the case of people in liquidation beneath chapter 7 or in reorganization beneath chapter 11 of title 11, part 1141(d)(2) incorporates by reference the exceptions to discharge continued in part 523. Different guidelines regarding the discharge of taxes the place a partnership or company reorganizes beneath chapter 11, apply beneath part 1141.

The House modification additionally deletes the discount rule contained in part 523(e) of the Senate modification. Under that rule, the quantity of an in any other case nondischargeable tax legal responsibility could be lowered by the quantity which a governmental tax authority may have collected from the debtor’s property if it had filed a well timed declare towards the property however which it didn’t gather as a result of no such declare was filed. This provision is deleted so as to not successfully compel a tax authority to file declare towards the property in “no asset” instances, together with a dischargeability petition. In no-asset instances, subsequently, if the tax authority isn’t probably penalized by failing to file a declare, the debtor in such instances could have a greater alternative to decide on the prepayment discussion board, chapter court docket or the Tax Court, by which to litigate his private legal responsibility for a nondischargeable tax.

The House modification additionally adopts the Senate modification provision limiting the nondischargeability of punitive tax penalties, that’s, penalties apart from these which symbolize assortment of a principal quantity of tax legal responsibility by the type of a “penalty.” Under the House modification, tax penalties that are mainly punitive in nature are to be nondischargeable provided that the penalty is computed by reference to a associated tax legal responsibility which is nondischargeable or, if the quantity of the penalty isn’t computed by reference to a tax legal responsibility, the transaction or occasion giving rise to the penalty occurred throughout the 3-year interval ending on the date of the petition.

senate report no. 95–989

This part specifies which of the debtor’s money owed should not discharged in a chapter case, and sure procedures for effectuating the part. The provision in Bankruptcy Act § 17c [section 35(c) of former title 11] granting the chapter courts jurisdiction to find out dischargeability is deleted as pointless, in view of the excellent grant of jurisdiction prescribed in proposed 28 U.S.C. 1334(b), which is enough to cowl the complete jurisdiction that the chapter courts have at present over dischargeability and associated points beneath Bankruptcy Act § 17c. The Rules of Bankruptcy Procedure will specify, as they do at present, who could request determinations of dischargeability, topic, in fact, to proposed 11 U.S.C. 523(c), and when such a request could also be made. Proposed 11 U.S.C. 350, offering for reopening of instances, supplies one potential process for a willpower of dischargeability and associated points after a case is closed.

Subsection (a) lists 9 sorts of money owed excepted from discharge. Taxes which are excepted from discharge are set forth in paragraph (1). These embrace claims towards the debtor which obtain precedence within the second, third and sixth classes (§ 507(a)(3)(B) and (c) and (6)). These classes embrace taxes for which the tax authority didn’t file a declare towards the property or filed its declare late. Whether or not the taxing authority’s declare is secured may even not have an effect on the declare’s nondischargeability if the tax legal responsibility in query is in any other case entitled to precedence.

Also included within the nondischargeable money owed are taxes for which the debtor had not filed a required return as of the petition date, or for which a return had been filed past its final permitted due date (§ 523(a)(1)(B)). For this goal, the date of the tax yr to which the return relates is immaterial. The late return rule applies, nevertheless, solely to the late returns filed inside three years earlier than the petition was filed, and to late returns filed after the petition in title 11 was filed. For this goal, the taxable yr in query needn’t be a number of of the three years instantly previous the submitting of the petition.

Tax claims with respect to which the debtor filed a fraudulent return, entry or bill, or fraudulently tried to evade or defeat any tax (§ 523(a)(1)(C)) are included. The date of the taxable yr with regard to which the fraud occurred is immaterial.

Also included are tax funds due beneath an settlement for deferred fee of taxes, which a debtor had entered into with the Internal Revenue Service (or State or native tax authority) earlier than the submitting of the petition and which relate to a prepetition tax legal responsibility (§ 523(a)(1)(D)) are additionally nondischargeable. This classification applies solely to tax claims which might have acquired precedence beneath part 507(a) if the taxpayer had filed a title 11 petition on the date on which the deferred fee settlement was entered into. This rule additionally applies solely to installment funds which turn into due throughout and after the graduation of the title 11 case. Payments which had turn into due inside one yr earlier than the submitting of the petition obtain sixth precedence, and will likely be nondischargeable beneath the overall rule of part 523(a)(1)(A).

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The above classes of nondischargeability apply to customs duties in addition to to taxes.

Paragraph (2) supplies that as beneath Bankruptcy Act § 17a(2) [section 35(a)(2) of former title 11], a debt for acquiring cash, property, companies, or a refinancing extension or renewal of credit by false pretenses, a false illustration, or precise fraud, or by use of a press release in writing respecting the debtor’s monetary situation that’s materially false, on which the creditor fairly relied, and which the debtor made or printed with intent to deceive, is excepted from discharge. This provision is modified solely barely from present part 17a(2). First, “actual fraud” is added as a floor for exception from discharge. Second, the creditor should not solely have relied on a false assertion in writing, however the reliance will need to have been cheap. This codifies case legislation construing current part 17a(2). Third, the phrase “in any manner whatsoever” that seems in present legislation after “made or published” is deleted as pointless, the phrase “published” is utilized in the identical sense that it’s utilized in defamation instances.

Unscheduled money owed are excepted from discharge beneath paragraph (3). The provision, derived from part 17a(3) [section 35(a)(3) of former title 11], follows present legislation, however clarifies some uncertainties generated by the case legislation construing 17a(3). The debt is excepted from discharge if it was not scheduled in time to allow well timed motion by the creditor to guard his rights, except the creditor had discover or precise data of the case.

Paragraph (4) excepts money owed for fraud incurred by the debtor whereas performing in a fiduciary capability or for defalcation, embezzlement, or misappropriation.

Paragraph (5) supplies that money owed for willful and malicious conversion or damage by the debtor to a different entity or the property of one other entity are nondischargeable. Under this paragraph “willful” means deliberate or intentional. To the extent that Tinker v. Colwell, 139 U.S. 473 (1902), held {that a} much less strict normal is meant, and to the extent that different instances have relied on Tinker to use a “reckless disregard” normal, they’re overruled.

Paragraph (6) excepts from discharge money owed to a partner, former partner, or youngster of the debtor for alimony to, upkeep for, or help of the partner or youngster. This language, together with the repeal of part 456(b) of the Social Security Act (42 U.S.C. 656(b)) by part 326 of the invoice, will apply to make nondischargeable solely alimony, upkeep, or help owed on to a partner or dependent. What constitutes alimony, upkeep, or help, will likely be decided beneath the chapter legislation, not State legislation. Thus, instances resembling In re Waller, 494 F.second 447 (sixth Cir. 1974), are overruled, and the lead to instances resembling Fife v. Fife, 1 Utah second 281, 265 P.second 642 (1952) is adopted. The proviso, nevertheless, makes nondischargeable any money owed ensuing from an settlement by the debtor to carry the debtor’s partner innocent on joint money owed, to the extent that the settlement is in fee of alimony, upkeep, or help of the partner, as decided beneath chapter legislation issues as as to if a selected settlement to pay cash to a partner is definitely alimony or a property settlement.

Paragraph (7) makes nondischargeable sure liabilities for penalties together with tax penalties if the underlying tax with respect to which the penalty was imposed can also be nondischargeable (sec. 523(a)(7)). These latter liabilities cowl these which, however are penal in nature, as distinct from so-called “pecuniary loss” penalties which, within the case of taxes, contain mainly the gathering of a tax beneath the label of a “penalty.” This provision differs from the invoice as launched, which didn’t hyperlink the nondischarge of a tax penalty with the remedy of the underlying tax. The amended provision displays the present place of the Internal Revenue Service as to tax penalties imposed by the Internal Revenue Code (Rev.Rul. 68–574, 1968–2 C.B. 595).

Paragraph (8) follows usually present legislation and excerpts from discharge student loans till such loans have been due and owing for 5 years. Such loans embrace direct student loans in addition to insured and assured loans. This provision is meant to be self-executing and the lender or establishment isn’t required to file a grievance to find out the nondischargeability of any student loan.

Paragraph (9) excepts from discharge money owed that the debtor owed earlier than a earlier chapter case regarding the debtor by which the debtor was denied a discharge apart from on the premise of the six-year bar.

Subsection (b) of this part permits discharge in a chapter case of an unscheduled debt from a previous case. This provision is carried over from Bankruptcy Act § 17b [section 35(b) of former title 11]. The consequence dictated by the subsection would in all probability not be completely different if the subsection weren’t included. It is included nonetheless for readability.

Subsection (c) requires a creditor who’s owed a debt that could be excepted from discharge beneath paragraph (2), (4), or (5), (false statements, defalcation or larceny misappropriation, or willful and malicious damage) to provoke proceedings within the chapter court docket for an exception to discharge. If the creditor doesn’t act, the debt is discharged. This provision doesn’t change present legislation.

Subsection (d) is new. It supplies safety to a shopper debtor that dealt truthfully with a creditor who sought to have a debt excepted from discharge on the bottom of falsity within the incurring of the debt. The debtor could also be awarded prices and an inexpensive legal professional’s price for the continuing to find out the dischargeability of a debt beneath subsection (a)(2), if the court docket finds that the continuing was frivolous or not introduced by its creditor in good religion.

The goal of the supply is to discourage collectors from initiating proceedings to acquiring a false monetary assertion exception to discharge within the hope of acquiring a settlement from an sincere debtor anxious to save lots of legal professional’s charges. Such practices impair the debtor’s recent begin and are opposite to the spirit of the chapter legal guidelines.

home report no. 95–595

Subsection (a) lists eight sorts of money owed excepted from discharge. Taxes which are entitled to precedence are excepted from discharge beneath paragraph (1). In addition, taxes with respect to which the debtor made a fraudulent return or willfully tried to evade or defeat, or with respect to which a return (if required) was not filed or was not filed after the due date and after one yr earlier than the chapter case are excepted from discharge. If the taxing authority’s declare has been disallowed, then it will be barred by the extra fashionable guidelines of collateral estoppel from reasserting that declare towards the debtor after the case was closed. See Plumb, The Tax Recommendations of the Commission on the Bankruptcy Laws: Tax Procedures, 88 Harv.L.Rev. 1360, 1388 (1975).

As beneath Bankruptcy Act § 17a(2) [section 35(a)(2) of former title 11], debt for acquiring cash, property, companies, or an extension or renewal of credit by false pretenses, a false illustration, or precise fraud, or by use of a press release in writing respecting the debtor’s monetary situation that’s materially false, on which the creditor fairly relied, and that the debtor made or printed with intent to deceive, is excepted from discharge. This provision is modified solely barely from present part 17a(2). First, “actual fraud” is added as a grounds for exception from discharge. Second, the creditor should not solely have relied on a false assertion in writing, the reliance will need to have been cheap. This codifies case legislation construing this provision. Third, the phrase “in any manner whatsoever” that seems in present legislation after “made or published” is deleted as pointless. The phrase “published” is utilized in the identical sense that it’s utilized in slander actions.

Unscheduled money owed are excepted from discharge beneath paragraph (3). The provision, derived from part 17a(3) [section 35(a)(3) of former title 11], follows present legislation, however clarifies some uncertainties generated by the case legislation construing 17a(3). The debt is excepted from discharge if it was not scheduled in time to allow well timed motion by the creditor to guard his rights, except the creditor had discover or precise data of the case.

Paragraph (4) excepts money owed for embezzlement or larceny. The deletion of willful and malicious conversion from § 17a(2) of the Bankruptcy Act [section 35(a)(2) of former title 11] isn’t supposed to impact a substantive change. The intent is to incorporate within the class of non-dischargeable money owed a conversion beneath which the debtor willfully and maliciously intends to borrow property for a brief time frame with no intent to inflict damage however on which damage is in actual fact inflicted.

Paragraph (5) excepts from discharge money owed to a partner, former partner, or youngster of the debtor for alimony to, upkeep for, or help of, the partner or youngster. This language, together with the repeal of part 456(b) of the Social Security Act (42 U.S.C. 656(b)) by part 327 of the invoice, will apply to make nondischargeable solely alimony, upkeep, or help owed on to a partner or dependent. See Hearings, pt. 2, at 942. What constitutes alimony, upkeep, or help, will likely be decided beneath the chapter legal guidelines, not State legislation. Thus, instances resembling In re Waller, 494 F.second 447 (sixth Cir. 1974); Hearings, pt. 3, at 1308–10, are overruled, and the lead to instances resembling Fife v. Fife, 1 Utah second 281, 265 P.second 642 (1952) is adopted. This provision will, nevertheless, make nondischargeable any money owed ensuing from an settlement by the debtor to carry the debtor’s partner innocent on joint money owed, to the extent that the settlement is in fee of alimony, upkeep, or help of the partner, as decided beneath chapter legislation issues which are just like issues of whether or not a selected settlement to pay cash to a partner is definitely alimony or a property settlement. See Hearings, pt. 3, at 1287–1290.

Paragraph (6) excepts money owed for willful and malicious damage by the debtor to a different individual or to the property of one other individual. Under this paragraph, “willful” means deliberate or intentional. To the extent that Tinker v. Colwell, 193 U.S. 473 (1902) [24 S.Ct. 505, 48 L.Ed. 754, 11 Am.Bankr.Rep. 568], held {that a} looser normal is meant, and to the extent that different instances have relied on Tinker to use a “reckless disregard” normal, they’re overruled.

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Paragraph (7) excepts from discharge a debt for a fantastic, penalty, or forfeiture payable to and for the advantage of a governmental unit, that isn’t compensation for precise pecuniary loss.

Paragraph (8) [enacted as (9)] excepts from discharge money owed that the debtor owed earlier than a earlier chapter case regarding the debtor by which the debtor was denied a discharge apart from on the premise of the six-year bar.

Subsection (d) is new. It supplies safety to a shopper debtor that dealt truthfully with a creditor who sought to have a debt excepted from discharge on grounds of falsity within the incurring of the debt. The debtor is entitled to prices of and an inexpensive legal professional’s price for the continuing to find out the discharge­skill of a debt beneath subsection (a)(2), if the creditor initiated the continuing and the debt was decided to be dischargeable. The court docket is permitted to award any precise pecuniary loss that the debtor could have suffered on account of the continuing (resembling lack of a day’s pay). The goal of the supply is to discourage collectors from initiating false monetary assertion exception to discharge actions within the hopes of acquiring a settlement from an sincere debtor anxious to save lots of legal professional’s charges. Such practices impair the debtor’s recent begin.

Editorial Notes

References in Text

The Internal Revenue Code of 1986, referred to in subsec. (a), is assessed usually to Title 26, Internal Revenue Code.

Section 103 of the Truth in Lending Act, referred to in subsec. (a)(2)(C)(ii)(I), is assessed to part 1602 of Title 15, Commerce and Trade.

The Bankruptcy Act, referred to in subsecs. (a)(10) and (b), is act July 1, 1898, ch. 541, 30 Stat. 544, as amended, which was categorised usually to former Title 11. Sections 14c and 17a of the Bankruptcy Act have been categorised to sections 32(c) and 35(a) of former Title 11.

Section 408(b)(1) of the Employee Retirement Income Security Act of 1974, referred to in subsec. (a)(18)(A), is assessed to part 1108(b)(1) of Title 29, Labor.

Section 3(a)(47) of the Securities Exchange Act of 1934, referred to in subsec. (a)(19)(A)(i), is assessed to part 78c(a)(47) of Title 15, Commerce and Trade.

Section 439A of the Higher Education Act of 1965, referred to in subsec. (b), was categorised to part 1087–3 of Title 20, Education, and was repealed by Pub. L. 95–598, title III, § 317, Nov. 6, 1978, 92 Stat. 2678.

Section 733(g) of the Public Health Service Act, referred to in subsec. (b), was repealed by Pub. L. 95–598, title III, § 327, Nov. 6, 1978, 92 Stat. 2679. A subsec. (g), containing related provisions, was added to part 733 by Pub. L. 97–35, title XXVII, § 2730, Aug. 13, 1981, 95 Stat. 919. Section 733 was subsequently omitted within the normal revision of subchapter V of chapter 6A of Title 42, The Public Health and Welfare, by Pub. L. 102–408, title I, § 102, Oct. 13, 1992, 106 Stat. 1994. See part 292f(g) of Title 42.

Amendments

2019—Subsec. (a). Pub. L. 116–54 inserted “1192” after “1141,” in introductory provisions.

2010—Subsec. (a)(2)(C)(ii)(II). Pub. L. 111–327, § 2(a)(18)(A), substituted semicolon for interval at finish.

Subsec. (a)(3). Pub. L. 111–327, § 2(a)(18)(B), substituted “521(a)(1)” for “521(1)” in introductory provisions.

2005—Pub. L. 109–8, § 1209(1), transferred par. (15) and inserted it after subsec. (a)(14A). See 1994 Amendments word under.

Pub. L. 109–8, § 215(3), in par. (15), inserted “to a spouse, former spouse, or child of the debtor and” earlier than “not of the kind” and “or” after “court of record,” and substituted a semicolon for “except—

“(A) the debtor doesn’t have the power to pay such debt from earnings or property of the debtor not fairly essential to be expended for the upkeep or help of the debtor or a dependent of the debtor and, if the debtor is engaged in a enterprise, for the fee of expenditures essential for the continuation, preservation, and operation of such enterprise; or

“(B) discharging such debt would result in a benefit to the debtor that outweighs the detrimental consequences to a spouse, former spouse, or child of the debtor;”.

Subsec. (a). Pub. L. 109–8, § 714(2), inserted at finish “For purposes of this subsection, the term ‘return’ means a return that satisfies the requirements of applicable nonbankruptcy law (including applicable filing requirements). Such term includes a return prepared pursuant to section 6020(a) of the Internal Revenue Code of 1986, or similar State or local law, or a written stipulation to a judgment or a final order entered by a nonbankruptcy tribunal, but does not include a return made pursuant to section 6020(b) of the Internal Revenue Code of 1986, or a similar State or local law.”

Subsec. (a)(1)(A). Pub. L. 109–8, § 1502(a)(2), substituted “507(a)(3)” for “507(a)(2)”.

Subsec. (a)(1)(B). Pub. L. 109–8, § 714(1)(A), inserted “or equivalent report or notice,” after “a return,” in introductory provisions.

Subsec. (a)(1)(B)(i). Pub. L. 109–8, § 714(1)(B), inserted “or given” after “filed”.

Subsec. (a)(1)(B)(ii). Pub. L. 109–8, § 714(1)(C), inserted “or given” after “filed” and “, report, or notice” after “return”.

Subsec. (a)(2)(C). Pub. L. 109–8, § 310, amended subpar. (C) usually. Prior to modification, subpar. (C) learn as follows: “for purposes of subparagraph (A) of this paragraph, consumer debts owed to a single creditor and aggregating more than $1,000 for ‘luxury goods or services’ incurred by an individual debtor on or within 60 days before the order for relief under this title, or cash advances aggregating more than $1,000 that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 60 days before the order for relief under this title, are presumed to be nondischargeable; ‘luxury goods or services’ do not include goods or services reasonably acquired for the support or maintenance of the debtor or a dependent of the debtor; an extension of consumer credit under an open end credit plan is to be defined for purposes of this subparagraph as it is defined in the Consumer Credit Protection Act;”.

Subsec. (a)(5). Pub. L. 109–8, § 215(1)(A), added par. (5) and struck out former par. (5) which learn as follows: “to a partner, former partner, or youngster of the debtor, for alimony to, upkeep for, or help of such partner or youngster, in reference to a separation settlement, divorce decree or different order of a court docket of report, willpower made in accordance with State or territorial legislation by a governmental unit, or property settlement settlement, however to not the extent that—

“(A) such debt is assigned to a different entity, voluntarily, by operation of legislation, or in any other case (apart from money owed assigned pursuant to part 408(a)(3) of the Social Security Act, or any such debt which has been assigned to the Federal Government or to a State or any political subdivision of such State); or

“(B) such debt includes a liability designated as alimony, maintenance, or support, unless such liability is actually in the nature of alimony, maintenance, or support;”

Subsec. (a)(8). Pub. L. 109–8, § 220, added par. (8) and struck out former par. (8) which learn as follows: “for an educational benefit overpayment or loan made, insured or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution, or for an obligation to repay funds received as an educational benefit, scholarship or stipend, unless excepting such debt from discharge under this paragraph will impose an undue hardship on the debtor and the debtor’s dependents;”.

Subsec. (a)(9). Pub. L. 109–8, § 1209(2), substituted “motor vehicle, vessel, or aircraft” for “motor vehicle”.

Subsec. (a)(14A). Pub. L. 109–8, § 314(a), added par. (14A).

Subsec. (a)(14B). Pub. L. 109–8, § 1235, added par. (14B).

Subsec. (a)(16). Pub. L. 109–8, § 412, struck out “dwelling” after “debtor’s interest in a” and “housing” after “share of a cooperative” and substituted “ownership,” for “ownership or” and “or a lot in a homeowners association, for as long as the debtor or the trustee has a legal, equitable, or possessory ownership interest in such unit, such corporation, or such lot,” for “however provided that such price or evaluation is payable for a interval throughout which—

“(A) the debtor bodily occupied a dwelling unit within the condominium or cooperative challenge; or

“(B) the debtor rented the dwelling unit to a tenant and received payments from the tenant for such period,”.

Subsec. (a)(17). Pub. L. 109–8, § 301, substituted “on a prisoner by any court” for “by a court” and “subsection (b) or (f)(2) of section 1915” for “section 1915(b) or (f)” and inserted “(or a similar non-Federal law)” after “title 28” in two locations.

Subsec. (a)(18). Pub. L. 109–8, § 224(c), added par. (18).

Pub. L. 109–8, § 215(1)(B), struck out par. (18) which learn as follows: “owed beneath State legislation to a State or municipality that’s—

“(A) within the nature of help, and

“(B) enforceable under part D of title IV of the Social Security Act (42 U.S.C. 601 et seq.); or”.

Subsec. (a)(19)(B). Pub. L. 109–8, § 1404(a), inserted “, before, on, or after the date on which the petition was filed,” after “results” in introductory provisions.

Subsec. (c)(1). Pub. L. 109–8, § 215(2), substituted “or (6)” for “(6), or (15)” in two locations.

Subsec. (e). Pub. L. 109–8, § 1209(3), substituted “an insured” for “a insured”.

2002—Subsec. (a)(19). Pub. L. 107–204 added par. (19).

1998—Subsec. (a)(8). Pub. L. 105–244 substituted “stipend, unless” for “stipend, unless—” and struck out “(B)” earlier than “excepting such debt” and subpar. (A) which learn as follows: “such loan, benefit, scholarship, or stipend overpayment first became due more than 7 years (exclusive of any applicable suspension of the repayment period) before the date of the filing of the petition; or”.

1996—Subsec. (a)(5)(A). Pub. L. 104–193, § 374(a)(4), substituted “section 408(a)(3)” for “section 402(a)(26)”.

Subsec. (a)(17). Pub. L. 104–134 added par. (17).

Subsec. (a)(18). Pub. L. 104–193, § 374(a)(1)–(3), added par. (18).

1994—Par. (15). Pub. L. 103–394, § 304(e)[(1)], amended this part by including par. (15) on the finish. See 2005 Amendment word above.

Subsec. (a). Pub. L. 103–394, § 501(d)(13)(A)(i), substituted “1141,” for “1141,,” in introductory provisions.

Subsec. (a)(1)(A). Pub. L. 103–394, § 304(h)(3), substituted “507(a)(8)” for “507(a)(7)”.

Subsec. (a)(2)(C). Pub. L. 103–394, §§ 306, 501(d)(13)(A)(ii), substituted “$1,000 for” for “$500 for”, “60” for “forty” after “incurred by an individual debtor on or within”, and “60” for “twenty” after “obtained by an individual debtor on or within”, and struck out “(15 U.S.C. 1601 et seq.)” after “Protection Act”.

READ:   Resolving Delinquency for Federal Student Loans

Subsec. (a)(11). Pub. L. 103–322, § 320934(1), struck out “or” after semicolon at finish.

Subsec. (a)(12). Pub. L. 103–322, § 320934(2), which directed the substitution of “; or” for a interval at finish of par. (12), couldn’t be executed as a result of a interval didn’t seem at finish.

Subsec. (a)(13). Pub. L. 103–394, § 221(1), substituted semicolon for interval at finish.

Pub. L. 103–322, § 320934(3), added par. (13).

Subsec. (a)(14). Pub. L. 103–394, § 221(2), added par. (14).

Subsec. (a)(16). Pub. L. 103–394, § 309, added par. (16).

Subsec. (b). Pub. L. 103–394, § 501(d)(13)(B), struck out “(20 U.S.C. 1087–3)” after “Act of 1965” and “(42 U.S.C. 294f)” after “Service Act”.

Subsec. (c)(1). Pub. L. 103–394, § 304(e)(2), substituted “(6), or (15)” for “or (6)” in two locations.

Subsec. (e). Pub. L. 103–394, § 501(d)(13)(C), substituted “insured depository institution” for “depository institution or insured credit union”.

1990—Subsec. (a)(8). Pub. L. 101–647, § 3621, substituted “for an educational benefit overpayment or loan made, insured or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution, or for an obligation to repay funds received as an educational benefit, scholarship or stipend, unless” for “for an educational loan made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or a nonprofit institution, unless” in introductory provisions and amended subpar. (A) usually. Prior to modification, subpar. (A) learn as follows: “such loan first became due before five years (exclusive of any applicable suspension of the repayment period) before the date of the filing of the petition; or”.

Subsec. (a)(9). Pub. L. 101–581 and Pub. L. 101–647, § 3102(a), identically amended par. (9) usually. Prior to modification, par. (9) learn as follows: “to any entity, to the extent that such debt arises from a judgment or consent decree entered in a court of record against the debtor wherein liability was incurred by such debtor as a result of the debtor’s operation of a motor vehicle while legally intoxicated under the laws or regulations of any jurisdiction within the United States or its territories wherein such motor vehicle was operated and within which such liability was incurred; or”.

Subsec. (a)(11), (12). Pub. L. 101–647, § 2522(a)(1), added pars. (11) and (12).

Subsec. (c). Pub. L. 101–647, § 2522(a)(3), designated current provisions as par. (1) and added par. (2).

Subsec. (e). Pub. L. 101–647, § 2522(a)(2), added subsec. (e).

1986—Subsec. (a). Pub. L. 99–554, § 257(n), inserted reference to sections 1228(a) and 1228(b) of this title.

Subsec. (a)(1)(A). Pub. L. 99–554, § 283(j)(1)(A), substituted “507(a)(7)” for “507(a)(6)”.

Subsec. (a)(5). Pub. L. 99–554, § 281, struck out the comma after “decree” and inserted “, determination made in accordance with State or territorial law by a governmental unit,” after “record”.

Subsec. (a)(9), (10). Pub. L. 99–554, § 283(j)(1)(B), redesignated par. (9) referring to money owed incurred by individuals driving whereas intoxicated, added by Pub. L. 98–353, as (10).

Subsec. (b). Pub. L. 99–554, § 283(j)(2), substituted “Service” for “Services”.

1984—Subsec. (a)(2). Pub. L. 98–353, § 454(a)(1), in provisions previous subpar. (A), struck out “obtaining” after “for”, and substituted “refinancing of credit, to the extent obtained” for “refinance of credit,”.

Subsec. (a)(2)(A). Pub. L. 98–353, § 307(a)(1), struck out “or” at finish.

Subsec. (a)(2)(B). Pub. L. 98–353, § 307(a)(2), inserted “or” at finish.

Subsec. (a)(2)(B)(iii). Pub. L. 98–353, § 454(a)(1)(A), struck out “obtaining” earlier than “such”.

Subsec. (a)(2)(C). Pub. L. 98–353, § 307(a)(3), added subpar. (C).

Subsec. (a)(5). Pub. L. 98–353, § 454(b)(1), inserted “or other order of a court of record” after “divorce decree,” in provisions previous subpar. (A).

Subsec. (a)(5)(A). Pub. L. 98–353, § 454(b)(2), inserted “, or any such debt which has been assigned to the Federal Government or to a State or any political subdivision of such State”.

Subsec. (a)(8). Pub. L. 98–353, §§ 371(1), 454(a)(2), struck out “of higher education” after “a nonprofit institution of” and struck out “or” at finish.

Subsec. (a)(9). Pub. L. 98–353, § 371(2), added the par. (9) referring to money owed incurred by individuals driving whereas intoxicated.

Subsec. (c). Pub. L. 98–353, § 454(c), inserted “of a kind” after “debt”.

Subsec. (d). Pub. L. 98–353, § 307(b), substituted “the court shall grant judgment in favor of the debtor for the costs of, and a reasonable attorney’s fee for, the proceeding if the court finds that the position of the creditor was not substantially justified, except that the court shall not award such costs and fees if special circumstances would make the award unjust” for “the court shall grant judgment against such creditor and in favor of the debtor for the costs of, and a reasonable attorney’s fee for, the proceeding to determine dischargeability, unless such granting of judgment would be clearly inequitable”.

1981—Subsec. (a)(5)(A). Pub. L. 97–35 substituted “law, or otherwise (other than debts assigned pursuant to section 402(a)(26) of the Social Security Act);” for “law, or otherwise;”.

1979—Subsec. (a)(8). Pub. L. 96–56 substituted “for an educational loan made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or a nonprofit institution of higher education” for “to a governmental unit, or a nonprofit institution of higher education, for an educational loan” within the provisions previous subpar. (A) and inserted “(exclusive of any applicable suspension of the repayment period)” after “before five years” in subpar. (A).

Statutory Notes and Related Subsidiaries

Effective Date of 2005 Amendment

Pub. L. 109–8, title XIV, § 1404(b), Apr. 20, 2005, 119 Stat. 215, offered that:

“The amendment made by subsection (a) [amending this section] is effective beginning July 30, 2002.”

Amendment by sections 215, 220, 224(c), 301, 310, 314(a), 412, 714, 1209, 1235, and 1502(a)(2) of Pub. L. 109–8 efficient 180 days after Apr. 20, 2005, and never relevant with respect to instances commenced beneath this title earlier than such efficient date, besides as in any other case offered, see part 1501 of Pub. L. 109–8, set out as a word beneath part 101 of this title.

Effective Date of 1998 Amendment

Pub. L. 105–244, title IX, § 971(b), Oct. 7, 1998, 112 Stat. 1837, offered that:

“The amendment made by subsection (a) [amending this section] shall apply only with respect to cases commenced under title 11, United States Code, after the date of enactment of this Act [Oct. 7, 1998].”

Effective Date of 1996 Amendment

Pub. L. 104–193, title III, § 374(c), Aug. 22, 1996, 110 Stat. 2256, offered that:

“The amendments made by this section [amending this section and section 656 of Title 42, The Public Health and Welfare] shall apply only with respect to cases commenced under title 11 of the United States Code after the date of the enactment of this Act [Aug. 22, 1996].”

For provisions referring to efficient date of title III of Pub. L. 104–193, see part 395(a)–(c) of Pub. L. 104–193, set out as a word beneath part 654 of Title 42, The Public Health and Welfare.

Effective Date of 1990 Amendment

Pub. L. 101–647, title XXXI, § 3104, Nov. 29, 1990, 104 Stat. 4916, offered that:

“(a) Effective Date.—

This title and the amendments made by this title [amending this section and section 1328 of this title and enacting provisions set out as a note under section 101 of this title] shall take impact on the date of the enactment of this Act [Nov. 29, 1990].
“(b) Application of Amendments.—

The amendments made by this title [amending this section and section 1328 of this title] shall not apply with respect to instances commenced beneath title 11 of the United States Code earlier than the date of the enactment of this Act.”

Amendment by part 3621 of Pub. L. 101–647 efficient 180 days after Nov. 29, 1990, see part 3631 of Pub. L. 101–647, set out as an Effective Date word beneath part 3001 of Title 28, Judiciary and Judicial Procedure.

Pub. L. 101–581, § 4, Nov. 15, 1990, 104 Stat. 2865, offered that:

“(a) Effective Date.—

This Act and the amendments made by this Act [amending this section and section 1328 of this title and enacting provisions set out as a note under section 101 of this title] shall take impact on the date of the enactment of this Act [Nov. 15, 1990].
“(b) Application of Amendments.—

The amendments made by this Act [amending this section and section 1328 of this title] shall not apply with respect to instances commenced beneath title 11 of the United States Code earlier than the date of the enactment of this Act.”

Court Rules and Judicial Documents

Adjustment of Dollar Amounts

The greenback quantities specified on this part have been adjusted by notices of the Judicial Conference of the United States pursuant to part 104 of this title as follows:

By discover dated Feb. 5, 2019, 84 F.R. 3488, efficient Apr. 1, 2019, in subsec. (a)(2)(C)(i)(I), greenback quantity “675” was adjusted to “725” and, in subsec. (a)(2)(C)(i)(II), greenback quantity “950” was adjusted to “1,000”. See discover of the Judicial Conference of the United States set out as a word beneath part 104 of this title.

By discover dated Feb. 16, 2016, 81 F.R. 8748, efficient Apr. 1, 2016, in subsec. (a)(2)(C)(i)(I), greenback quantity “650” was adjusted to “675” and, in subsec. (a)(2)(C)(i)(II), greenback quantity “925” was adjusted to “950”.

By discover dated Feb. 12, 2013, 78 F.R. 12089, efficient Apr. 1, 2013, in subsec. (a)(2)(C)(i)(I), greenback quantity “600” was adjusted to “650” and, in subsec. (a)(2)(C)(i)(II), greenback quantity “875” was adjusted to “925”.

By discover dated Feb. 19, 2010, 75 F.R. 8747, efficient Apr. 1, 2010, in subsec. (a)(2)(C)(i)(I), greenback quantity “550” was adjusted to “600” and, in subsec. (a)(2)(C)(i)(II), greenback quantity “825” was adjusted to “875”.

By discover dated Feb. 7, 2007, 72 F.R. 7082, efficient Apr. 1, 2007, in subsec. (a)(2)(C)(i)(I), greenback quantity “500” was adjusted to “550” and, in subsec. (a)(2)(C)(i)(II), greenback quantity “750” was adjusted to “825”.

[Pub. L. 109–8 amended subsec. (a)(2)(C) generally. See 2005 Amendment note above.]

By discover dated Feb. 18, 2004, 69 F.R. 8482, efficient Apr. 1, 2004, in subsec. (a)(2)(C), greenback quantity “1,150” was adjusted to “1,225” every time it appeared.

By discover dated Feb. 13, 2001, 66 F.R. 10910, efficient Apr. 1, 2001, in subsec. (a)(2)(C), greenback quantity “1,075” was adjusted to “1,150” every time it appeared.

By discover dated Feb. 3, 1998, 63 F.R. 7179, efficient Apr. 1, 1998, in subsec. (a)(2)(C), greenback quantity “1,000” was adjusted to “1,075” every time it appeared.

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