It is no secret that creditors want to be paid. Perhaps in a perfect world every debt would be paid in full and on time. Unfortunately, life happens and sometimes individuals are not able to pay their debts. Creditors are aware of this and try to protect themselves with binding contracts and agreements. One clause that regularly appears is the “bankruptcy waiver.” The debtor agrees that he or she will not discharge the debt in a future bankruptcy case.
Waivers of future bankruptcy rights are not enforceable. In drafting the bankruptcy code, Congress expressly stated that the bankruptcy discharge voids judgments and operates as an injunction against the continuation of any action against a debtor personally, “whether or not discharge of such debt is waived.” See 11 U.S.C. § 524(a)(1) and (2). The revision notes explain that this language is “intended to prevent waiver of discharge of a particular debt from defeating the purposes of this section.”
Congress found that it is against public policy to allow waivers of future bankruptcy rights. To do so would undermine the availability of the bankruptcy process, since every loan or extension of credit would contain a waiver of bankruptcy. That is not to say that the debtor has no power to exclude a debt from discharge. After filing bankruptcy, a debtor is permitted to waive the discharge of a debt under two circumstances: the debtor may reaffirm the debt under § 524(c); or the debtor can execute a waiver of discharge that is approved by the bankruptcy court under § 727(a)(10).
While an agreement to not file bankruptcy is universally considered void because it violates public policy, telling a creditor that you will not file bankruptcy when you actually intend to file is a serious matter. If you take a loan with the intention of discharging it through bankruptcy, and with no intention on repaying it, you may have committed fraud and even a criminal act! The creditor may ask the bankruptcy court to except the debt from the bankruptcy discharge, and may file a criminal complaint against you.
If you have executed a waiver of bankruptcy rights, discuss the matter with an experienced attorney. Your attorney can advise you as to the enforceability of this waiver. Don’t let creditors and debts control your life. Get the facts and explore your options to rid yourself of overwhelming debt.