11 U.S.C. § 523 — Exceptions to discharge

Page 140 TITLE 11—BANKRUPTCY § 523 1 So in original. Probably should be followed by a comma. 2 See Adjustment of Dollar Amounts notes below. amount ‘‘600’’ was adjusted to ‘‘650’’ each time it ap- peared; in subsec. (n), dollar amount ‘‘1,171,650’’ was ad- justed to ‘‘1,245,475’’; in subsec. (p), dollar amount ‘‘146,450’’ was adjusted to ‘‘155,675’’; and, in subsec. (q), dollar amount ‘‘146,450’’ was adjusted to ‘‘155,675’’. By notice dated Feb. 19, 2010, 75 F.R. 8747, effective Apr. 1, 2010, in subsec. (d)(1), dollar amount ‘‘20,200’’ was adjusted to ‘‘21,625’’; in subsec. (d)(2), dollar amount ‘‘3,225’’ was adjusted to ‘‘3,450’’; in subsec. (d)(3), dollar amounts ‘‘525’’ and ‘‘10,775’’ were adjusted to ‘‘550’’ and ‘‘11,525’’, respectively; in subsec. (d)(4), dollar amount ‘‘1,350’’ was adjusted to ‘‘1,450’’; in subsec. (d)(5), dollar amounts ‘‘1,075’’ and ‘‘10,125’’ were adjusted to ‘‘1,150’’ and ‘‘10,825’’, respectively; in subsec. (d)(6), dollar amount ‘‘2,025’’ was adjusted to ‘‘2,175’’; in subsec. (d)(8), dollar amount ‘‘10,775’’ was adjusted to ‘‘11,525’’; in subsec. (d)(11)(D), dollar amount ‘‘20,200’’ was ad- justed to ‘‘21,625’’; in subsec. (f)(3)(B), dollar amount ‘‘5,475’’ was adjusted to ‘‘5,850’’; in subsec. (f)(4)(B), dol- lar amount ‘‘550’’ was adjusted to ‘‘600’’ each time it ap- peared; in subsec. (n), dollar amount ‘‘1,095,000’’ was ad- justed to ‘‘1,171,650’’; in subsec. (p)(1), dollar amount ‘‘136,875’’ was adjusted to ‘‘146,450’’; and, in subsec. (q)(1), dollar amount ‘‘136,875’’ was adjusted to ‘‘146,450’’. By notice dated Feb. 7, 2007, 72 F.R. 7082, effective Apr. 1, 2007, in subsec. (d)(1), dollar amount ‘‘18,450’’ was adjusted to ‘‘20,200’’; in subsec. (d)(2), dollar amount ‘‘2,950’’ was adjusted to ‘‘3,225’’; in subsec. (d)(3), dollar amounts ‘‘475’’ and ‘‘9,850’’ were adjusted to ‘‘525’’ and ‘‘10,775’’, respectively; in subsec. (d)(4), dollar amount ‘‘1,225’’ was adjusted to ‘‘1,350’’; in subsec. (d)(5), dollar amounts ‘‘975’’ and ‘‘9,250’’ were adjusted to ‘‘1,075’’ and ‘‘10,125’’, respectively; in subsec. (d)(6), dollar amount ‘‘1,850’’ was adjusted to ‘‘2,025’’; in subsec. (d)(8), dollar amount ‘‘9,850’’ was adjusted to ‘‘10,775’’; in subsec. (d)(11)(D), dollar amount ‘‘18,450’’ was adjusted to ‘‘20,200’’; in subsec. (f)(3), dollar amount ‘‘5,000’’ was ad- justed to ‘‘5,475’’; in subsec. (f)(4), dollar amount ‘‘500’’ was adjusted to ‘‘550’’ each time it appeared; in subsec. (n), dollar amount ‘‘1,000,000’’ was adjusted to ‘‘1,095,000’’; in subsec. (p), dollar amount ‘‘125,000’’ was adjusted to ‘‘136,875’’; and, in subsec. (q), dollar amount ‘‘125,000’’ was adjusted to ‘‘136,875’’. By notice dated Feb. 18, 2004, 69 F.R. 8482, effective Apr. 1, 2004, in subsec. (d)(1), dollar amount ‘‘17,425’’ was adjusted to ‘‘18,450’’; in subsec. (d)(2), dollar amount ‘‘2,775’’ was adjusted to ‘‘2,950’’; in subsec. (d)(3), dollar amounts ‘‘450’’ and ‘‘9,300’’ were adjusted to ‘‘475’’ and ‘‘9,850’’, respectively; in subsec. (d)(4), dollar amount ‘‘1,150’’ was adjusted to ‘‘1,225’’; in subsec. (d)(5), dollar amounts ‘‘925’’ and ‘‘8,725’’ were adjusted to ‘‘975’’ and ‘‘9,250’’, respectively; in subsec. (d)(6), dollar amount ‘‘1,750’’ was adjusted to ‘‘1,850’’; in subsec. (d)(8), dollar amount ‘‘9,300’’ was adjusted to ‘‘9,850’’; and, in subsec. (d)(11)(D), dollar amount ‘‘17,425’’ was adjusted to ‘‘18,450’’. By notice dated Feb. 13, 2001, 66 F.R. 10910, effective Apr. 1, 2001, in subsec. (d)(1), dollar amount ‘‘16,150’’ was adjusted to ‘‘17,425’’; in subsec. (d)(2), dollar amount ‘‘2,575’’ was adjusted to ‘‘2,775’’; in subsec. (d)(3), dollar amounts ‘‘425’’ and ‘‘8,625’’ were adjusted to ‘‘450’’ and ‘‘9,300’’, respectively; in subsec. (d)(4), dollar amount ‘‘1,075’’ was adjusted to ‘‘1,150’’; in subsec. (d)(5), dollar amounts ‘‘850’’ and ‘‘8,075’’ were adjusted to ‘‘925’’ and ‘‘8,725’’, respectively; in subsec. (d)(6), dollar amount ‘‘1,625’’ was adjusted to ‘‘1,750’’; in subsec. (d)(8), dollar amount ‘‘8,625’’ was adjusted to ‘‘9,300’’; and, in subsec. (d)(11)(D), dollar amount ‘‘16,150’’ was adjusted to ‘‘17,425’’. By notice dated Feb. 3, 1998, 63 F.R. 7179, effective Apr. 1, 1998, in subsec. (d)(1), dollar amount ‘‘15,000’’ was adjusted to ‘‘16,150’’; in subsec. (d)(2), dollar amount ‘‘2,400’’ was adjusted to ‘‘2,575’’; in subsec. (d)(3), dollar amounts ‘‘400’’ and ‘‘8,000’’ were adjusted to ‘‘425’’ and ‘‘8,625’’, respectively; in subsec. (d)(4), dollar amount ‘‘1,000’’ was adjusted to ‘‘1,075’’; in subsec. (d)(5), dollar amounts ‘‘800’’ and ‘‘7,500’’ were adjusted to ‘‘850’’ and ‘‘8,075’’, respectively; in subsec. (d)(6), dollar amount ‘‘1,500’’ was adjusted to ‘‘1,625’’; in subsec. (d)(8), dollar amount ‘‘8,000’’ was adjusted to ‘‘8,625’’; and, in subsec. (d)(11)(D), dollar amount ‘‘15,000’’ was adjusted to ‘‘16,150’’. § 523. Exceptions to discharge (a) A discharge under section 727, 1141, 1192 1 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt— (1) for a tax or a customs duty— (A) of the kind and for the periods speci- fied in section 507(a)(3) or 507(a)(8) of this title, whether or not a claim for such tax was filed or allowed; (B) with respect to which a return, or equivalent report or notice, if required— (i) was not filed or given; or (ii) was filed or given after the date on which such return, report, or notice was last due, under applicable law or under any extension, and after two years before the date of the filing of the petition; or (C) with respect to which the debtor made a fraudulent return or willfully attempted in any manner to evade or defeat such tax; (2) for money, property, services, or an ex- tension, renewal, or refinancing of credit, to the extent obtained by— (A) false pretenses, a false representation, or actual fraud, other than a statement re- specting the debtor’s or an insider’s finan- cial condition; (B) use of a statement in writing— (i) that is materially false; (ii) respecting the debtor’s or an insid- er’s financial condition; (iii) on which the creditor to whom the debtor is liable for such money, property, services, or credit reasonably relied; and (iv) that the debtor caused to be made or published with intent to deceive; or (C)(i) for purposes of subparagraph (A)— (I) consumer debts owed to a single cred- itor and aggregating more than $500 2 for luxury goods or services incurred by an in- dividual debtor on or within 90 days before the order for relief under this title are pre- sumed to be nondischargeable; and (II) cash advances aggregating more than $750 2 that are extensions of consumer credit under an open end credit plan ob- tained by an individual debtor on or within 70 days before the order for relief under this title, are presumed to be non- dischargeable; and (ii) for purposes of this subparagraph— (I) the terms ‘‘consumer’’, ‘‘credit’’, and ‘‘open end credit plan’’ have the same meanings as in section 103 of the Truth in Lending Act; and (II) the term ‘‘luxury goods or services’’ does not include goods or services reason- ably necessary for the support or mainte- nance of the debtor or a dependent of the debtor; (3) neither listed nor scheduled under section 521(a)(1) of this title, with the name, if known Page 141 TITLE 11—BANKRUPTCY § 523 to the debtor, of the creditor to whom such debt is owed, in time to permit— (A) if such debt is not of a kind specified in paragraph (2), (4), or (6) of this subsection, timely filing of a proof of claim, unless such creditor had notice or actual knowledge of the case in time for such timely filing; or (B) if such debt is of a kind specified in paragraph (2), (4), or (6) of this subsection, timely filing of a proof of claim and timely request for a determination of dis- chargeability of such debt under one of such paragraphs, unless such creditor had notice or actual knowledge of the case in time for such timely filing and request; (4) for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny; (5) for a domestic support obligation; (6) for willful and malicious injury by the debtor to another entity or to the property of another entity; (7) to the extent such debt is for a fine, pen- alty, or forfeiture payable to and for the ben- efit of a governmental unit, and is not com- pensation for actual pecuniary loss, other than a tax penalty— (A) relating to a tax of a kind not specified in paragraph (1) of this subsection; or (B) imposed with respect to a transaction or event that occurred before three years be- fore the date of the filing of the petition; (8) unless excepting such debt from dis- charge under this paragraph would impose an undue hardship on the debtor and the debtor’s dependents, for— (A)(i) an educational benefit overpayment or loan made, insured, or guaranteed by a governmental unit, or made under any pro- gram funded in whole or in part by a govern- mental unit or nonprofit institution; or (ii) an obligation to repay funds received as an educational benefit, scholarship, or stipend; or (B) any other educational loan that is a qualified education loan, as defined in sec- tion 221(d)(1) of the Internal Revenue Code of 1986, incurred by a debtor who is an indi- vidual; (9) for death or personal injury caused by the debtor’s operation of a motor vehicle, vessel, or aircraft if such operation was unlawful be- cause the debtor was intoxicated from using alcohol, a drug, or another substance; (10) that was or could have been listed or scheduled by the debtor in a prior case con- cerning the debtor under this title or under the Bankruptcy Act in which the debtor waived discharge, or was denied a discharge under section 727(a)(2), (3), (4), (5), (6), or (7) of this title, or under section 14c(1), (2), (3), (4), (6), or (7) of such Act; (11) provided in any final judgment, unreviewable order, or consent order or decree entered in any court of the United States or of any State, issued by a Federal depository in- stitutions regulatory agency, or contained in any settlement agreement entered into by the debtor, arising from any act of fraud or defal- cation while acting in a fiduciary capacity committed with respect to any depository in- stitution or insured credit union; (12) for malicious or reckless failure to ful- fill any commitment by the debtor to a Fed- eral depository institutions regulatory agency to maintain the capital of an insured deposi- tory institution, except that this paragraph shall not extend any such commitment which would otherwise be terminated due to any act of such agency; (13) for any payment of an order of restitu- tion issued under title 18, United States Code; (14) incurred to pay a tax to the United States that would be nondischargeable pursu- ant to paragraph (1); (14A) incurred to pay a tax to a govern- mental unit, other than the United States, that would be nondischargeable under para- graph (1); (14B) incurred to pay fines or penalties im- posed under Federal election law; (15) to a spouse, former spouse, or child of the debtor and not of the kind described in paragraph (5) that is incurred by the debtor in the course of a divorce or separation or in con- nection with a separation agreement, divorce decree or other order of a court of record, or a determination made in accordance with State or territorial law by a governmental unit; (16) for a fee or assessment that becomes due and payable after the order for relief to a membership association with respect to the debtor’s interest in a unit that has condo- minium ownership, in a share of a cooperative corporation, or a lot in a homeowners associa- tion, 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, but nothing in this paragraph shall except from discharge the debt of a debtor for a membership association fee or assessment for a period arising before entry of the order for relief in a pending or subsequent bank- ruptcy case; (17) for a fee imposed on a prisoner by any court for the filing of a case, motion, com- plaint, or appeal, or for other costs and ex- penses assessed with respect to such filing, re- gardless of an assertion of poverty by the debt- or under subsection (b) or (f)(2) of section 1915 of title 28 (or a similar non-Federal law), or the debtor’s status as a prisoner, as defined in section 1915(h) of title 28 (or a similar non- Federal law); (18) owed to a pension, profit-sharing, stock bonus, or other plan established under section 401, 403, 408, 408A, 414, 457, or 501(c) of the In- ternal Revenue Code of 1986, under— (A) a loan permitted under section 408(b)(1) of the Employee Retirement Income Secu- rity Act of 1974, or subject to section 72(p) of the Internal Revenue Code of 1986; or (B) a loan from a thrift savings plan per- mitted under subchapter III of chapter 84 of title 5, that satisfies the requirements of section 8433(g) of such title; but nothing in this paragraph may be con- strued to provide that any loan made under a governmental plan under section 414(d), or a contract or account under section 403(b), of the Internal Revenue Code of 1986 constitutes a claim or a debt under this title; (19) that— Page 142 TITLE 11—BANKRUPTCY § 523 3 See References in Text note below. (A) is for— (i) the violation of any of the Federal se- curities laws (as that term is defined in section 3(a)(47) of the Securities Exchange Act of 1934), any of the State securities laws, or any regulation or order issued under such Federal or State securities laws; or (ii) common law fraud, deceit, or manip- ulation in connection with the purchase or sale of any security; and (B) results, before, on, or after the date on which the petition was filed, from— (i) any judgment, order, consent order, or decree entered in any Federal or State judicial or administrative proceeding; (ii) any settlement agreement entered into by the debtor; or (iii) any court or administrative order for any damages, fine, penalty, citation, restitutionary payment, disgorgement payment, attorney fee, cost, or other pay- ment owed by the debtor; or (20) for injury to an individual by the debtor relating to a violation of chapter 77 of title 18, including injury caused by an instance in which the debtor knowingly benefitted finan- cially, or by receiving anything of value, from participation in a venture that the debtor knew or should have known engaged in an act in violation of chapter 77 of title 18. For purposes of this subsection, the term ‘‘re- turn’’ means a return that satisfies the require- ments of applicable nonbankruptcy law (includ- ing 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 stipula- tion 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. (b) Notwithstanding subsection (a) of this sec- tion, a debt that was excepted from discharge under subsection (a)(1), (a)(3), or (a)(8) of this section, under section 17a(1), 17a(3), or 17a(5) of the Bankruptcy Act, under section 439A 3 of the Higher Education Act of 1965, or under section 733(g) 3 of the Public Health Service Act in a prior case concerning the debtor under this title, or under the Bankruptcy Act, is discharge- able in a case under this title unless, by the terms of subsection (a) of this section, such debt is not dischargeable in the case under this title. (c)(1) Except as provided in subsection (a)(3)(B) of this section, the debtor shall be discharged from a debt of a kind specified in paragraph (2), (4), or (6) of subsection (a) of this section, unless, on request of the creditor to whom such debt is owed, and after notice and a hearing, the court determines such debt to be excepted from dis- charge under paragraph (2), (4), or (6), as the case may be, of subsection (a) of this section. (2) Paragraph (1) shall not apply in the case of a Federal depository institutions regulatory agency seeking, in its capacity as conservator, receiver, or liquidating agent for an insured de- pository institution, to recover a debt described in subsection (a)(2), (a)(4), (a)(6), or (a)(11) owed to such institution by an institution-affiliated party unless the receiver, conservator, or liqui- dating agent was appointed in time to reason- ably comply, or for a Federal depository institu- tions regulatory agency acting in its corporate capacity as a successor to such receiver, conser- vator, or liquidating agent to reasonably com- ply, with subsection (a)(3)(B) as a creditor of such institution-affiliated party with respect to such debt. (d) If a creditor requests a determination of dischargeability of a consumer debt under sub- section (a)(2) of this section, and such debt is discharged, the court shall grant judgment in favor of the debtor for the costs of, and a reason- able 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 cir- cumstances would make the award unjust. (e) Any institution-affiliated party of an in- sured depository institution shall be considered to be acting in a fiduciary capacity with respect to the purposes of subsection (a)(4) or (11). (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2590; Pub. L. 96–56, § 3, Aug. 14, 1979, 93 Stat. 387; Pub. L. 97–35, title XXIII, § 2334(b), Aug. 13, 1981, 95 Stat. 863; Pub. L. 98–353, title III, §§ 307, 371, 454, July 10, 1984, 98 Stat. 353, 364, 375; Pub. L. 99–554, title II, §§ 257(n), 281, 283(j), Oct. 27, 1986, 100 Stat. 3115–3117; Pub. L. 101–581, § 2(a), Nov. 15, 1990, 104 Stat. 2865; Pub. L. 101–647, title XXV, § 2522(a), title XXXI, § 3102(a), title XXXVI, § 3621, Nov. 29, 1990, 104 Stat. 4865, 4916, 4964; Pub. L. 103–322, title XXXII, § 320934, Sept. 13, 1994, 108 Stat. 2135; Pub. L. 103–394, title II, § 221, title III, §§ 304(e), (h)(3), 306, 309, title V, § 501(d)(13), Oct. 22, 1994, 108 Stat. 4129, 4133–4135, 4137, 4145; Pub. L. 104–134, title I, § 101[(a)] [title VIII, § 804(b)], Apr. 26, 1996, 110 Stat. 1321, 1321–74; renumbered title I, Pub. L. 104–140, § 1(a), May 2, 1996, 110 Stat. 1327; Pub. L. 104–193, title III, § 374(a), Aug. 22, 1996, 110 Stat. 2255; Pub. L. 105–244, title IX, § 971(a), Oct. 7, 1998, 112 Stat. 1837; Pub. L. 107–204, title VIII, § 803, July 30, 2002, 116 Stat. 801; Pub. L. 109–8, title II, §§ 215, 220, 224(c), title III, §§ 301, 310, 314(a), title IV, § 412, title VII, § 714, title XII, §§ 1209, 1235, title XIV, § 1404(a), title XV, § 1502(a)(2), Apr. 20, 2005, 119 Stat. 54, 59, 64, 75, 84, 88, 107, 128, 194, 204, 215, 216; Pub. L. 111–327, § 2(a)(18), Dec. 22, 2010, 124 Stat. 3559; Pub. L. 116–54, § 4(a)(8), Aug. 23, 2019, 133 Stat. 1086; Pub. L. 117–347, title II, § 201, Jan. 5, 2023, 136 Stat. 6205.) HISTORICAL AND REVISION NOTES LEGISLATIVE STATEMENTS Section 523(a)(1) represents a compromise between the position taken in the House bill and the Senate amendment. Section 523(a)(2) likewise represents a compromise between the position taken in the House bill and the Senate amendment with respect to the false financial statement exception to discharge. In order to clarify that a ‘‘renewal of credit’’ includes a ‘‘refinancing of credit’’, explicit reference to a refi- nancing of credit is made in the preamble to section 523(a)(2). A renewal of credit or refinancing of credit that was obtained by a false financial statement within the terms of section 523(a)(2) is nondischargeable. How- Page 143 TITLE 11—BANKRUPTCY § 523 ever, each of the provisions of section 523(a)(2) must be proved. Thus, under section 523(a)(2)(A) a creditor must prove that the debt was obtained by false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s finan- cial condition. Subparagraph (A) is intended to codify current case law e.g., Neal v. Clark, 95 U.S. 704 (1887) [24 L. Ed. 586], which interprets ‘‘fraud’’ to mean actual or positive fraud rather than fraud implied in law. Sub- paragraph (A) is mutually exclusive from subparagraph (B). Subparagraph (B) pertains to the so-called false fi- nancial statement. In order for the debt to be non- dischargeable, the creditor must prove that the debt was obtained by the use of a statement in writing (i) that is materially false; (ii) respecting the debtor’s or an insider’s financial condition; (iii) on which the cred- itor to whom the debtor is liable for obtaining money, property, services, or credit reasonably relied; (iv) that the debtor caused to be made or published with intent to deceive. Section 523(a)(2)(B)(iv) is not intended to change from present law since the statement that the debtor causes to be made or published with the intent to deceive automatically includes a statement that the debtor actually makes or publishes with an intent to deceive. Section 523(a)(2)(B) is explained in the House report. Under section 523(a)(2)(B)(i) a discharge is barred only as to that portion of a loan with respect to which a false financial statement is materially false. In many cases, a creditor is required by state law to refinance existing credit on which there has been no de- fault. If the creditor does not forfeit remedies or other- wise rely to his detriment on a false financial state- ment with respect to existing credit, then an extension, renewal, or refinancing of such credit is nondischarge- able only to the extent of the new money advanced; on the other hand, if an existing loan is in default or the creditor otherwise reasonably relies to his detriment on a false financial statement with regard to an exist- ing loan, then the entire debt is nondischargeable under section 523(a)(2)(B). This codifies the reasoning expressed by the second circuit in In re Danns, 558 F.2d 114 (2d Cir. 1977). Section 523(a)(3) of the House amendment is derived from the Senate amendment. The provision is intended 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 amendment represents a compromise between the House bill and the Senate amendment. Section 523(a)(5) is a compromise between the House bill and the Senate amendment. The provision excepts from discharge a debt owed to a spouse, former spouse or child of the debtor, in connection with a separation agreement, divorce decree, or property settlement agreement, for alimony to, maintenance for, or support of such spouse or child but not to the extent that the debt is assigned to another entity. If the debtor has as- sumed an obligation of the debtor’s spouse to a third party in connection with a separation agreement, prop- erty settlement agreement, or divorce proceeding, such debt is dischargeable to the extent that payment of the debt by the debtor is not actually in the nature of ali- mony, maintenance, or support of debtor’s spouse, former spouse, or child. Section 523(a)(6) adopts the position taken in the House bill and rejects the alternative suggested in the Senate amendment. The phrase ‘‘willful and malicious injury’’ covers a willful and malicious conversion. Section 523(a)(7) of the House amendment adopts the position taken in the Senate amendment and rejects the position taken in the House bill. A penalty relating to a tax cannot be nondischargeable unless the tax itself is nondischargeable. Section 523(a)(8) represents a compromise between the House bill and the Senate amendment regarding educational loans. This provision is broader than cur- rent law which is limited to federally insured loans. Only educational loans owing to a governmental unit or a nonprofit institution of higher education are made nondischargeable under this paragraph. Section 523(b) is new. The section represents a modi- fication of similar provisions contained in the House bill and the Senate amendment. Section 523(c) of the House amendment adopts the po- sition taken in the Senate amendment. Section 523(d) represents a compromise between the position taken in the House bill and the Senate amend- ment on the issue of attorneys’ fees in false financial statement complaints to determine dischargeability. The provision contained in the House bill permitting the court to award damages is eliminated. The court must grant the debtor judgment or a reasonable attor- neys’ fee unless the granting of judgment would be clearly inequitable. Nondischargeable debts: The House amendment re- tains the basic categories of nondischargeable tax li- abilities contained in both bills, but restricts the time limits on certain nondischargeable taxes. Under the amendment, nondischargeable taxes cover taxes enti- tled to priority under section 507(a)(6) of title 11 and, in the case of individual debtors under chapters 7, 11, or 13, tax liabilities with respect to which no required re- turn had been filed or as to which a late return had been filed if the return became last due, including ex- tensions, within 2 years before the date of the petition or became due after the petition or as to which the debtor made a fraudulent return, entry or invoice or fraudulently attempted to evade or defeat the tax. In the case of individuals in liquidation under chapter 7 or in reorganization under chapter 11 of title 11, sec- tion 1141(d)(2) incorporates by reference the exceptions to discharge continued in section 523. Different rules concerning the discharge of taxes where a partnership or corporation reorganizes under chapter 11, apply under section 1141. The House amendment also deletes the reduction rule contained in section 523(e) of the Senate amendment. Under that rule, the amount of an otherwise non- dischargeable tax liability would be reduced by the amount which a governmental tax authority could have collected from the debtor’s estate if it had filed a timely claim against the estate but which it did not collect because no such claim was filed. This provision is deleted in order not to effectively compel a tax au- thority to file claim against the estate in ‘‘no asset’’ cases, along with a dischargeability petition. In no- asset cases, therefore, if the tax authority is not poten- tially penalized by failing to file a claim, the debtor in such cases will have a better opportunity to choose the prepayment forum, bankruptcy court or the Tax Court, in which to litigate his personal liability for a non- dischargeable tax. The House amendment also adopts the Senate amend- ment provision limiting the nondischargeability of pu- nitive tax penalties, that is, penalties other than those which represent collection of a principal amount of tax liability through the form of a ‘‘penalty.’’ Under the House amendment, tax penalties which are basically punitive in nature are to be nondischargeable only if the penalty is computed by reference to a related tax liability which is nondischargeable or, if the amount of the penalty is not computed by reference to a tax li- ability, the transaction or event giving rise to the pen- alty occurred during the 3-year period ending on the date of the petition. SENATE REPORT NO. 95–989 This section specifies which of the debtor’s debts are not discharged in a bankruptcy case, and certain proce- dures for effectuating the section. The provision in Bankruptcy Act § 17c [section 35(c) of former title 11] granting the bankruptcy courts jurisdiction to deter- mine dischargeability is deleted as unnecessary, in view of the comprehensive grant of jurisdiction pre- scribed in proposed 28 U.S.C. 1334(b), which is adequate to cover the full jurisdiction that the bankruptcy courts have today over dischargeability and related issues under Bankruptcy Act § 17c. The Rules of Bank- ruptcy Procedure will specify, as they do today, who may request determinations of dischargeability, sub- Page 144 TITLE 11—BANKRUPTCY § 523 ject, of course, to proposed 11 U.S.C. 523(c), and when such a request may be made. Proposed 11 U.S.C. 350, providing for reopening of cases, provides one possible procedure for a determination of dischargeability and related issues after a case is closed. Subsection (a) lists nine kinds of debts excepted from discharge. Taxes that are excepted from discharge are set forth in paragraph (1). These include claims against the debtor which receive priority in the second, third and sixth categories (§ 507(a)(3)(B) and (c) and (6)). These categories include taxes for which the tax au- thority failed to file a claim against the estate or filed its claim late. Whether or not the taxing authority’s claim is secured will also not affect the claim’s nondischargeability if the tax liability in question is otherwise entitled to priority. Also included in the nondischargeable debts 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 beyond its last permitted due date (§ 523(a)(1)(B)). For this purpose, the date of the tax year to which the return relates is immaterial. The late return rule ap- plies, however, only to the late returns filed within three years before the petition was filed, and to late re- turns filed after the petition in title 11 was filed. For this purpose, the taxable year in question need not be one or more of the three years immediately preceding the filing of the petition. Tax claims with respect to which the debtor filed a fraudulent return, entry or invoice, or fraudulently at- tempted to evade or defeat any tax (§ 523(a)(1)(C)) are included. The date of the taxable year with regard to which the fraud occurred is immaterial. Also included are tax payments due under an agree- ment for deferred payment of taxes, which a debtor had entered into with the Internal Revenue Service (or State or local tax authority) before the filing of the pe- tition and which relate to a prepetition tax liability (§ 523(a)(1)(D)) are also nondischargeable. This classi- fication applies only to tax claims which would have received priority under section 507(a) if the taxpayer had filed a title 11 petition on the date on which the de- ferred payment agreement was entered into. This rule also applies only to installment payments which be- come due during and after the commencement of the title 11 case. Payments which had become due within one year before the filing of the petition receive sixth priority, and will be nondischargeable under the gen- eral rule of section 523(a)(1)(A). The above categories of nondischargeability apply to customs duties as well as to taxes. Paragraph (2) provides that as under Bankruptcy Act § 17a(2) [section 35(a)(2) of former title 11], a debt for ob- taining money, property, services, or a refinancing ex- tension or renewal of credit by false pretenses, a false representation, or actual fraud, or by use of a state- ment in writing respecting the debtor’s financial condi- tion that is materially false, on which the creditor rea- sonably relied, and which the debtor made or published with intent to deceive, is excepted from discharge. This provision is modified only slightly from current section 17a(2). First, ‘‘actual fraud’’ is added as a ground for ex- ception from discharge. Second, the creditor must not only have relied on a false statement in writing, but the reliance must have been reasonable. This codifies case law construing present section 17a(2). Third, the phrase ‘‘in any manner whatsoever’’ that appears in current law after ‘‘made or published’’ is deleted as un- necessary, the word ‘‘published’’ is used in the same sense that it is used in defamation cases. Unscheduled debts are excepted from discharge under paragraph (3). The provision, derived from section 17a(3) [section 35(a)(3) of former title 11], follows cur- rent law, but clarifies some uncertainties generated by the case law construing 17a(3). The debt is excepted from discharge if it was not scheduled in time to per- mit timely action by the creditor to protect his rights, unless the creditor had notice or actual knowledge of the case. Paragraph (4) excepts debts for fraud incurred by the debtor while acting in a fiduciary capacity or for defal- cation, embezzlement, or misappropriation. Paragraph (5) provides that debts for willful and ma- licious conversion or injury by the debtor to another entity or the property of another entity are non- dischargeable. Under this paragraph ‘‘willful’’ means deliberate or intentional. To the extent that Tinker v. Colwell, 139 U.S. 473 (1902), held that a less strict stand- ard is intended, and to the extent that other cases have relied on Tinker to apply a ‘‘reckless disregard’’ stand- ard, they are overruled. Paragraph (6) excepts from discharge debts to a spouse, former spouse, or child of the debtor for ali- mony to, maintenance for, or support of the spouse or child. This language, in combination with the repeal of section 456(b) of the Social Security Act (42 U.S.C. 656(b)) by section 326 of the bill, will apply to make nondischargeable only alimony, maintenance, or sup- port owed directly to a spouse or dependent. What con- stitutes alimony, maintenance, or support, will be de- termined under the bankruptcy law, not State law. Thus, cases such as In re Waller, 494 F.2d 447 (6th Cir. 1974), are overruled, and the result in cases such as Fife v. Fife, 1 Utah 2d 281, 265 P.2d 642 (1952) is followed. The proviso, however, makes nondischargeable any debts resulting from an agreement by the debtor to hold the debtor’s spouse harmless on joint debts, to the extent that the agreement is in payment of alimony, mainte- nance, or support of the spouse, as determined under bankruptcy law considerations as to whether a par- ticular agreement to pay money to a spouse is actually alimony or a property settlement. Paragraph (7) makes nondischargeable certain liabil- ities for penalties including tax penalties if the under- lying tax with respect to which the penalty was im- posed is also nondischargeable (sec. 523(a)(7)). These latter liabilities cover those which, but are penal in na- ture, as distinct from so-called ‘‘pecuniary loss’’ pen- alties which, in the case of taxes, involve basically the collection of a tax under the label of a ‘‘penalty.’’ This provision differs from the bill as introduced, which did not link the nondischarge of a tax penalty with the treatment of the underlying tax. The amended provi- sion reflects the existing position of the Internal Rev- enue Service as to tax penalties imposed by the Inter- nal Revenue Code (Rev.Rul. 68–574, 1968–2 C.B. 595). Paragraph (8) follows generally current law and ex- cerpts from discharge student loans until such loans have been due and owing for five years. Such loans in- clude direct student loans as well as insured and guar- anteed loans. This provision is intended to be self-exe- cuting and the lender or institution is not required to file a complaint to determine the nondischargeability of any student loan. Paragraph (9) excepts from discharge debts that the debtor owed before a previous bankruptcy case con- cerning the debtor in which the debtor was denied a discharge other than on the basis of the six-year bar. Subsection (b) of this section permits discharge in a bankruptcy case of an unscheduled debt from a prior case. This provision is carried over from Bankruptcy Act § 17b [section 35(b) of former title 11]. The result dictated by the subsection would probably not be dif- ferent if the subsection were not included. It is in- cluded nevertheless for clarity. Subsection (c) requires a creditor who is owed a debt that may be excepted from discharge under paragraph (2), (4), or (5), (false statements, defalcation or larceny misappropriation, or willful and malicious injury) to initiate proceedings in the bankruptcy court for an ex- ception to discharge. If the creditor does not act, the debt is discharged. This provision does not change cur- rent law. Subsection (d) is new. It provides protection to a con- sumer debtor that dealt honestly with a creditor who sought to have a debt excepted from discharge on the ground of falsity in the incurring of the debt. The debt- or may be awarded costs and a reasonable attorney’s fee for the proceeding to determine the dischargeability of a debt under subsection (a)(2), if the court finds that the proceeding was frivolous or not brought by its creditor in good faith. Page 145 TITLE 11—BANKRUPTCY § 523 The purpose of the provision is to discourage credi- tors from initiating proceedings to obtaining a false fi- nancial statement exception to discharge in the hope of obtaining a settlement from an honest debtor anxious to save attorney’s fees. Such practices impair the debt- or’s fresh start and are contrary to the spirit of the bankruptcy laws. HOUSE REPORT NO. 95–595 Subsection (a) lists eight kinds of debts excepted from discharge. Taxes that are entitled to priority are excepted from discharge under paragraph (1). In addi- tion, taxes with respect to which the debtor made a fraudulent return or willfully attempted to evade or de- feat, or with respect to which a return (if required) was not filed or was not filed after the due date and after one year before the bankruptcy case are excepted from discharge. If the taxing authority’s claim has been dis- allowed, then it would be barred by the more modern rules of collateral estoppel from reasserting that claim against 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 under Bankruptcy Act § 17a(2) [section 35(a)(2) of former title 11], debt for obtaining money, property, services, or an extension or renewal of credit by false pretenses, a false representation, or actual fraud, or by use of a statement in writing respecting the debtor’s fi- nancial condition that is materially false, on which the creditor reasonably relied, and that the debtor made or published with intent to deceive, is excepted from dis- charge. This provision is modified only slightly from current section 17a(2). First, ‘‘actual fraud’’ is added as a grounds for exception from discharge. Second, the creditor must not only have relied on a false statement in writing, the reliance must have been reasonable. This codifies case law construing this provision. Third, the phrase ‘‘in any manner whatsoever’’ that appears in current law after ‘‘made or published’’ is deleted as un- necessary. The word ‘‘published’’ is used in the same sense that it is used in slander actions. Unscheduled debts are excepted from discharge under paragraph (3). The provision, derived from section 17a(3) [section 35(a)(3) of former title 11], follows cur- rent law, but clarifies some uncertainties generated by the case law construing 17a(3). The debt is excepted from discharge if it was not scheduled in time to per- mit timely action by the creditor to protect his rights, unless the creditor had notice or actual knowledge of the case. Paragraph (4) excepts debts for embezzlement or lar- ceny. The deletion of willful and malicious conversion from § 17a(2) of the Bankruptcy Act [section 35(a)(2) of former title 11] is not intended to effect a substantive change. The intent is to include in the category of non- dischargeable debts a conversion under which the debt- or willfully and maliciously intends to borrow property for a short period of time with no intent to inflict in- jury but on which injury is in fact inflicted. Paragraph (5) excepts from discharge debts to a spouse, former spouse, or child of the debtor for ali- mony to, maintenance for, or support of, the spouse or child. This language, in combination with the repeal of section 456(b) of the Social Security Act (42 U.S.C. 656(b)) by section 327 of the bill, will apply to make nondischargeable only alimony, maintenance, or sup- port owed directly to a spouse or dependent. See Hear- ings, pt. 2, at 942. What constitutes alimony, mainte- nance, or support, will be determined under the bank- ruptcy laws, not State law. Thus, cases such as In re Waller, 494 F.2d 447 (6th Cir. 1974); Hearings, pt. 3, at 1308–10, are overruled, and the result in cases such as Fife v. Fife, 1 Utah 2d 281, 265 P.2d 642 (1952) is followed. This provision will, however, make nondischargeable any debts resulting from an agreement by the debtor to hold the debtor’s spouse harmless on joint debts, to the extent that the agreement is in payment of alimony, maintenance, or support of the spouse, as determined under bankruptcy law considerations that are similar to considerations of whether a particular agreement to pay money to a spouse is actually alimony or a prop- erty settlement. See Hearings, pt. 3, at 1287–1290. Paragraph (6) excepts debts for willful and malicious injury by the debtor to another person or to the prop- erty of another person. 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 standard is intended, and to the extent that other cases have re- lied on Tinker to apply a ‘‘reckless disregard’’ standard, they are overruled. Paragraph (7) excepts from discharge a debt for a fine, penalty, or forfeiture payable to and for the ben- efit of a governmental unit, that is not compensation for actual pecuniary loss. Paragraph (8) [enacted as (9)] excepts from discharge debts that the debtor owed before a previous bank- ruptcy case concerning the debtor in which the debtor was denied a discharge other than on the basis of the six-year bar. Subsection (d) is new. It provides protection to a con- sumer debtor that dealt honestly with a creditor who sought to have a debt excepted from discharge on grounds of falsity in the incurring of the debt. The debtor is entitled to costs of and a reasonable attor- ney’s fee for the proceeding to determine the discharge- ability of a debt under subsection (a)(2), if the creditor initiated the proceeding and the debt was determined to be dischargeable. The court is permitted to award any actual pecuniary loss that the debtor may have suffered as a result of the proceeding (such as loss of a day’s pay). The purpose of the provision is to discour- age creditors from initiating false financial statement exception to discharge actions in the hopes of obtaining a settlement from an honest debtor anxious to save at- torney’s fees. Such practices impair the debtor’s fresh start. Editorial Notes REFERENCES IN TEXT The Internal Revenue Code of 1986, referred to in sub- sec. (a), is classified generally to Title 26, Internal Rev- enue Code. Section 103 of the Truth in Lending Act, referred to in subsec. (a)(2)(C)(ii)(I), is classified to section 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, which was classified generally to former Title 11. Sections 14c and 17a of the Bankruptcy Act were classified to sec- tions 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 classified to section 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 classified to section 78c(a)(47) of Title 15, Commerce and Trade. Section 439A of the Higher Education Act of 1965, re- ferred to in subsec. (b), was classified to section 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, re- ferred to in subsec. (b), was repealed by Pub. L. 95–598, title III, § 327, Nov. 6, 1978, 92 Stat. 2679. A subsec. (g), containing similar provisions, was added to section 733 by Pub. L. 97–35, title XXVII, § 2730, Aug. 13, 1981, 95 Stat. 919. Section 733 was subsequently omitted in the general 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 section 292f(g) of Title 42. AMENDMENTS 2023—Subsec. (a)(20). Pub. L. 117–347 added par. (20). 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 period at end. Page 146 TITLE 11—BANKRUPTCY § 523 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 note below. Pub. L. 109–8, § 215(3), in par. (15), inserted ‘‘to a spouse, former spouse, or child of the debtor and’’ be- fore ‘‘not of the kind’’ and ‘‘or’’ after ‘‘court of record,’’ and substituted a semicolon for ‘‘unless— ‘‘(A) the debtor does not have the ability to pay such debt from income or property of the debtor not reasonably necessary to be expended for the mainte- nance or support of the debtor or a dependent of the debtor and, if the debtor is engaged in a business, for the payment of expenditures necessary for the con- tinuation, preservation, and operation of such busi- ness; or ‘‘(B) discharging such debt would result in a benefit to the debtor that outweighs the detrimental con- sequences to a spouse, former spouse, or child of the debtor;’’. Subsec. (a). Pub. L. 109–8, § 714(2), inserted at end ‘‘For purposes of this subsection, the term ‘return’ means a return that satisfies the requirements of applicable nonbankruptcy law (including applicable filing require- ments). 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 nonbank- ruptcy 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), sub- stituted ‘‘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) generally. Prior to amendment, subpar. (C) read as follows: ‘‘for purposes of subparagraph (A) of this para- graph, consumer debts owed to a single creditor and ag- gregating more than $1,000 for ‘luxury goods or serv- ices’ 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 exten- sions 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 depend- ent of the debtor; an extension of consumer credit under an open end credit plan is to be defined for pur- poses of this subparagraph as it is defined in the Con- sumer Credit Protection Act;’’. Subsec. (a)(5). Pub. L. 109–8, § 215(1)(A), added par. (5) and struck out former par. (5) which read as follows: ‘‘to a spouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of such spouse or child, in connection with a separation agreement, di- vorce decree or other order of a court of record, deter- mination made in accordance with State or territorial law by a governmental unit, or property settlement agreement, but not to the extent that— ‘‘(A) such debt is assigned to another entity, volun- tarily, by operation of law, or otherwise (other than debts assigned pursuant to section 408(a)(3) of the So- cial 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 ali- mony, 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 read 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 govern- mental unit or nonprofit institution, or for an obliga- tion 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 vehi- cle’’. 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 ‘‘dwell- ing’’ 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 asso- ciation, 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 ‘‘but only if such fee or assessment is payable for a period during which— ‘‘(A) the debtor physically occupied a dwelling unit in the condominium or cooperative project; or ‘‘(B) the debtor rented the dwelling unit to a tenant and received payments from the tenant for such pe- riod,’’. Subsec. (a)(17). Pub. L. 109–8, § 301, substituted ‘‘on a prisoner by any court’’ for ‘‘by a court’’ and ‘‘sub- section (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 places. Subsec. (a)(18). Pub. L. 109–8, § 224(c), added par. (18). Pub. L. 109–8, § 215(1)(B), struck out par. (18) which read as follows: ‘‘owed under State law to a State or municipality that is— ‘‘(A) in the nature of support, and ‘‘(B) enforceable under part D of title IV of the So- cial 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 places. Subsec. (e). Pub. L. 109–8, § 1209(3), substituted ‘‘an in- sured’’ for ‘‘a insured’’. 2002—Subsec. (a)(19). Pub. L. 107–204 added par. (19). 1998—Subsec. (a)(8). Pub. L. 105–244 substituted ‘‘sti- pend, unless’’ for ‘‘stipend, unless—’’ and struck out ‘‘(B)’’ before ‘‘excepting such debt’’ and subpar. (A) which read as follows: ‘‘such loan, benefit, scholarship, or stipend overpayment first became due more than 7 years (exclusive of any applicable suspension of the re- payment period) before the date of the filing of the pe- tition; or’’. 1996—Subsec. (a)(5)(A). Pub. L. 104–193, § 374(a)(4), sub- stituted ‘‘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 section by adding par. (15) at the end. See 2005 Amendment note above. Subsec. (a). Pub. L. 103–394, § 501(d)(13)(A)(i), sub- stituted ‘‘1141,’’ for ‘‘1141,,’’ in introductory provisions. Subsec. (a)(1)(A). Pub. L. 103–394, § 304(h)(3), sub- stituted ‘‘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’’. Subsec. (a)(11). Pub. L. 103–322, § 320934(1), struck out ‘‘or’’ after semicolon at end. Subsec. (a)(12). Pub. L. 103–322, § 320934(2), which di- rected the substitution of ‘‘; or’’ for a period at end of par. (12), could not be executed because a period did not appear at end. Page 147 TITLE 11—BANKRUPTCY § 523 Subsec. (a)(13). Pub. L. 103–394, § 221(1), substituted semicolon for period at end. 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 places. Subsec. (e). Pub. L. 103–394, § 501(d)(13)(C), substituted ‘‘insured depository institution’’ for ‘‘depository insti- tution 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 gov- ernmental unit or nonprofit institution, or for an obli- gation to repay funds received as an educational ben- efit, scholarship or stipend, unless’’ for ‘‘for an edu- cational loan made, insured, or guaranteed by a govern- mental 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) generally. Prior to amendment, subpar. (A) read as follows: ‘‘such loan first became due before five years (exclusive of any applicable suspen- sion of the repayment period) before the date of the fil- ing of the petition; or’’. Subsec. (a)(9). Pub. L. 101–581 and Pub. L. 101–647, § 3102(a), identically amended par. (9) generally. Prior to amendment, par. (9) read 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 ter- ritories 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 ex- isting 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 ref- erence to sections 1228(a) and 1228(b) of this title. Subsec. (a)(1)(A). Pub. L. 99–554, § 283(j)(1)(A), sub- stituted ‘‘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), redes- ignated par. (9) relating to debts incurred by persons driving while 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 provi- sions preceding 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 end. Subsec. (a)(2)(B). Pub. L. 98–353, § 307(a)(2), inserted ‘‘or’’ at end. Subsec. (a)(2)(B)(iii). Pub. L. 98–353, § 454(a)(1)(A), struck out ‘‘obtaining’’ before ‘‘such’’. Subsec. (a)(2)(C). Pub. L. 98–353, § 307(a)(3), added sub- par. (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 preceding subpar. (A). Subsec. (a)(5)(A). Pub. L. 98–353, § 454(b)(2), inserted ‘‘, or any such debt which has been assigned to the Fed- eral Government or to a State or any political subdivi- sion of such State’’. Subsec. (a)(8). Pub. L. 98–353, §§ 371(1), 454(a)(2), struck out ‘‘of higher education’’ after ‘‘a nonprofit institu- tion of’’ and struck out ‘‘or’’ at end. Subsec. (a)(9). Pub. L. 98–353, § 371(2), added the par. (9) relating to debts incurred by persons driving while 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 cir- cumstances 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 at- torney’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 non- profit institution of higher education’’ for ‘‘to a gov- ernmental unit, or a nonprofit institution of higher education, for an educational loan’’ in the provisions preceding 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 2019 AMENDMENT Amendment by Pub. L. 116–54 effective 180 days after Aug. 23, 2019, see section 5 of Pub. L. 116–54, set out as a note under section 101 of this title. EFFECTIVE DATE OF 2005 AMENDMENT Pub. L. 109–8, title XIV, § 1404(b), Apr. 20, 2005, 119 Stat. 215, provided that: ‘‘The amendment made by sub- section (a) [amending this section] is effective begin- ning 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 effec- tive 180 days after Apr. 20, 2005, and not applicable with respect to cases commenced under this title before such effective date, except as otherwise provided, see section 1501 of Pub. L. 109–8, set out as a note under section 101 of this title. EFFECTIVE DATE OF 1998 AMENDMENT Pub. L. 105–244, title IX, § 971(b), Oct. 7, 1998, 112 Stat. 1837, provided that: ‘‘The amendment made by sub- section (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, provided 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 relating to effective date of title III of Pub. L. 104–193, see section 395(a)–(c) of Pub. L. 104–193, set out as a note under section 654 of Title 42, The Pub- lic Health and Welfare. EFFECTIVE DATE OF 1994 AMENDMENT Amendment by Pub. L. 103–394 effective Oct. 22, 1994, and not applicable with respect to cases commenced under this title before Oct. 22, 1994, see section 702 of Pub. L. 103–394, set out as a note under section 101 of this title. Page 148 TITLE 11—BANKRUPTCY § 524 EFFECTIVE DATE OF 1990 AMENDMENT Pub. L. 101–647, title XXXI, § 3104, Nov. 29, 1990, 104 Stat. 4916, provided that: ‘‘(a) EFFECTIVE DATE.—This title and the amend- ments 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 ef- fect 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 cases commenced under title 11 of the United States Code be- fore the date of the enactment of this Act.’’ Amendment by section 3621 of Pub. L. 101–647 effec- tive 180 days after Nov. 29, 1990, see section 3631 of Pub. L. 101–647, set out as an Effective Date note under sec- tion 3001 of Title 28, Judiciary and Judicial Procedure. Pub. L. 101–581, § 4, Nov. 15, 1990, 104 Stat. 2865, pro- vided 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 effect 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 cases commenced under title 11 of the United States Code be- fore the date of the enactment of this Act.’’ EFFECTIVE DATE OF 1986 AMENDMENT Amendment by section 257 of Pub. L. 99–554 effective 30 days after Oct. 27, 1986, but not applicable to cases commenced under this title before that date, see sec- tion 302(a), (c)(1) of Pub. L. 99–554, set out as a note under section 581 of Title 28, Judiciary and Judicial Procedure. Amendment by sections 281 and 283 of Pub. L. 99–554 effective 30 days after Oct. 27, 1986, see section 302(a) of Pub. L. 99–554. EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98–353 effective with respect to cases filed 90 days after July 10, 1984, see section 552(a) of Pub. L. 98–353, set out as a note under section 101 of this title. EFFECTIVE DATE OF 1981 AMENDMENT Amendment by Pub. L. 97–35 effective Aug. 13, 1981, see section 2334(c) of Pub. L. 97–35, set out as a note under section 656 of Title 42, The Public Health and Welfare. Court Rules and Judicial Documents ADJUSTMENT OF DOLLAR AMOUNTS The dollar amounts specified in this section were ad- justed by notices of the Judicial Conference of the United States pursuant to section 104 of this title as follows: By notice dated Jan. 31, 2022, 87 F.R. 6625, effective Apr. 1, 2022, in subsec. (a)(2)(C)(i)(I), dollar amount ‘‘725’’ was adjusted to ‘‘800’’ and, in subsec. (a)(2)(C)(i)(II), dollar amount ‘‘1,000’’ was adjusted to ‘‘1,100’’. See notice of the Judicial Conference of the United States set out as a note under section 104 of this title. By notice dated Feb. 5, 2019, 84 F.R. 3488, effective Apr. 1, 2019, in subsec. (a)(2)(C)(i)(I), dollar amount ‘‘675’’ was adjusted to ‘‘725’’ and, in subsec. (a)(2)(C)(i)(II), dollar amount ‘‘950’’ was adjusted to ‘‘1,000’’. By notice dated Feb. 16, 2016, 81 F.R. 8748, effective Apr. 1, 2016, in subsec. (a)(2)(C)(i)(I), dollar amount ‘‘650’’ was adjusted to ‘‘675’’ and, in subsec. (a)(2)(C)(i)(II), dollar amount ‘‘925’’ was adjusted to ‘‘950’’. By notice dated Feb. 12, 2013, 78 F.R. 12089, effective Apr. 1, 2013, in subsec. (a)(2)(C)(i)(I), dollar amount ‘‘600’’ was adjusted to ‘‘650’’ and, in subsec. (a)(2)(C)(i)(II), dollar amount ‘‘875’’ was adjusted to ‘‘925’’. By notice dated Feb. 19, 2010, 75 F.R. 8747, effective Apr. 1, 2010, in subsec. (a)(2)(C)(i)(I), dollar amount ‘‘550’’ was adjusted to ‘‘600’’ and, in subsec. (a)(2)(C)(i)(II), dollar amount ‘‘825’’ was adjusted to ‘‘875’’. By notice dated Feb. 7, 2007, 72 F.R. 7082, effective Apr. 1, 2007, in subsec. (a)(2)(C)(i)(I), dollar amount ‘‘500’’ was adjusted to ‘‘550’’ and, in subsec. (a)(2)(C)(i)(II), dollar amount ‘‘750’’ was adjusted to ‘‘825’’. [Pub. L. 109–8 amended subsec. (a)(2)(C) generally. See 2005 Amendment note above.] By notice dated Feb. 18, 2004, 69 F.R. 8482, effective Apr. 1, 2004, in subsec. (a)(2)(C), dollar amount ‘‘1,150’’ was adjusted to ‘‘1,225’’ each time it appeared. By notice dated Feb. 13, 2001, 66 F.R. 10910, effective Apr. 1, 2001, in subsec. (a)(2)(C), dollar amount ‘‘1,075’’ was adjusted to ‘‘1,150’’ each time it appeared. By notice dated Feb. 3, 1998, 63 F.R. 7179, effective Apr. 1, 1998, in subsec. (a)(2)(C), dollar amount ‘‘1,000’’ was adjusted to ‘‘1,075’’ each time it appeared. § 524. Effect of discharge (a) A discharge in a case under this title— (1) voids any judgment at any time obtained, to the extent that such judgment is a deter- mination of the personal liability of the debt- or with respect to any debt discharged under section 727, 944, 1141, 1192, 1228, or 1328 of this title, whether or not discharge of such debt is waived; (2) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to col- lect, recover or offset any such debt as a per- sonal liability of the debtor, whether or not discharge of such debt is waived; and (3) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to col- lect or recover from, or offset against, prop- erty of the debtor of the kind specified in sec- tion 541(a)(2) of this title that is acquired after the commencement of the case, on account of any allowable community claim, except a community claim that is excepted from dis- charge under section 523, 1192, 1228(a)(1), or 1328(a)(1), or that would be so excepted, deter- mined in accordance with the provisions of sections 523(c) and 523(d) of this title, in a case concerning the debtor’s spouse commenced on the date of the filing of the petition in the case concerning the debtor, whether or not discharge of the debt based on such commu- nity claim is waived. (b) Subsection (a)(3) of this section does not apply if— (1)(A) the debtor’s spouse is a debtor in a case under this title, or a bankrupt or a debtor in a case under the Bankruptcy Act, com- menced within six years of the date of the fil- ing of the petition in the case concerning the debtor; and (B) the court does not grant the debtor’s spouse a discharge in such case concerning the debtor’s spouse; or (2)(A) the court would not grant the debtor’s spouse a discharge in a case under chapter 7 of