Understanding Non-Dischargeable Debts: Why Bankruptcy Isn’t a “Get Out of Jail Free” Card

 The primary goal of bankruptcy is to provide an “honest debtor” with a fresh start. However, the U.S. Bankruptcy Code is very specific as to which debts cannot be wiped out with bankruptcy. A fresh start does not include wiping away debts that are based on fraud or criminal activity. These are known as non-dischargeable debts.

In my latest YouTube video, I break down the categories of debt that follow you even after a bankruptcy discharge. To illustrate this, we look at the high-profile federal case of Herbert Wright III (rapper G-Herbo).

By Alexander Hernandez, J.D., Professor, and Author of Consumer Bankruptcy Law (Routledge).

Updated on January 8, 2026.

The G-Herbo Case: Fraud and Federal Restitution

In early 2024, G-Herbo was sentenced for his role in a wire fraud conspiracy involving stolen credit card information used to fund luxury travel. While he received probation, he was ordered to pay over $139,000 in restitution.

Under 11 U.S.C. § 523(a)(2)(A), the Code explicitly prohibits the discharge of any debt obtained by “false pretenses, a false representation, or actual fraud.”

Furthermore, Section 523(a)(7) and Section 1328(a)(3) ensure that criminal fines and restitution are protected from discharge to ensure that bankruptcy cannot be used to circumvent the penalties of the criminal justice system.

Common Debts That Survive Bankruptcy

While most credit card debt and medical bills are easily wiped out, the following obligations typically remain:

• Domestic Support Obligations (DSOs): Child support and alimony cannot be discharged in Chapter 7 or Chapter 13.
• Most Taxes: Recent income taxes (generally less than 3 years old) and “trust fund” taxes (payroll taxes) stay on the books.
• DUI Personal Injury: Under Section 523(a)(9), if you cause personal injury or death while operating a vehicle while intoxicated, that debt is non-dischargeable. (Note: Simple property damage from an accident may be dischargeable, but injury is not).
• Student Loans: Unless you can prove “undue hardship,” an incredibly high legal bar under the Brunner Test, student loans will not be discharged in bankruptcy.
• Unlisted Debts: If you “forget” to list a creditor in your petition, you may lose the right to discharge that specific debt. However, you can seek to amend the petition prior to discharge. In this prior article, I explain how to amend the bankruptcy petition.
• Willful and Malicious Acts: Debts arising from intentional harm to another person or their property (Section 523(a)(6)).

The Professor’s Take

Understanding these exceptions is vital for the successful completion of your bankruptcy case. For example, while you cannot discharge a criminal restitution debt, filing a Chapter 13 may allow you to create a 3-to-5-year repayment plan to manage those payments while discharging other unsecured debts (like medical bills) to free up your cash flow.

Watch the full video below for a deeper dive into the G-Herbo sentencing and the strict requirements of the Bankruptcy Code.

Colleges and universities can purchase my bankruptcy law textbook directly from Routledge Publishing. Paralegals and students who are buying single copies can do so via Amazon Books. To access my YouTube channel, click this link.

You can learn more about filing for bankruptcy and the bankruptcy petition via this link. Information on the bankruptcy court system, contact information for trustees, and your state’s exemptions can be found here. The federal bankruptcy exemptions are listed here. The latest version of the 341 Meeting of the Creditors can be found here.

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