NSF Fees - Dischargeable?

With the advent of electronic payments, fees for Non-Sufficient Funds (or NSF Fees) have become common.  When consumers spend more than what is in their accounts, this can result in banks charging NSF fees.  I often have clients that are concerned as to what would happen with the NSF fees and if they are dischargeable under bankruptcy. 

In short, NSF fees are dischargeable under bankruptcy as unsecured debt. As long as the client incurred the fees without knowing that they were using more than what was in their accounts, then NSF fees can be discharged.   The negative fees will be discharged and the bank account will be closed.  One issue that may arise with NSF fees would be if the creditor believes that the client knew they did not have enough in the account but still wrote checks from the account.  This could result in a separate lawsuit for writing bad checks and would have to be argued separately from the bankruptcy case to decide whether the NSF fees can be discharged. 

In sum, as long as you inadvertently overdrew your account and incurred NSF fees, the fees will be dischargeable under bankruptcy.