Which type of debt is considered non-dischargeable in bankruptcy?

Prepare for the CUNA Financial Counselor Exam. Use flashcards and multiple choice questions to study, with hints and explanations included. Ace your exam with thorough preparation!

Child support obligations are classified as non-dischargeable debt in bankruptcy. This means that individuals cannot eliminate their responsibility for paying child support through bankruptcy proceedings. The rationale behind this designation is that child support is intended to provide financial support for children, and the courts prioritize the welfare of minors above financial relief for the parent.

In contrast, other forms of debt, such as credit card debt, unsecured personal loans, and medical debts, can typically be discharged through bankruptcy, allowing individuals to alleviate their financial burden. Thus, recognizing the importance of child support in maintaining the welfare of children, the law maintains that these obligations must be honored regardless of the bankruptcy status of the individual responsible for them.

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