Taxes, Loans and Bankruptcy: Discharge or Non Dischargeable
Topic: Loans and Grants
Ian C. Langtree - Content Writer/Editor for Disabled World
Published: 2010/09/20 - Updated: 2023/11/27
Publication Type: Informative
Contents: Summary - Introduction - Main - Related
Synopsis: How to tell if your debts are likely to be discharged when you declare bankruptcy. Discharge or Non Dischargeable? That is the Question! It often happens that for one reason or another you owe back taxes. The IRS can be relentless in their pursuit for payment. The Wall Street Journal recently reported that student loan debt has now surpassed credit card debt. One can only hope that soon a person struggling for financial freedom will be able to discharge these debts also.
Introduction
Discharge or Non Dischargeable - That is the Question! - It often happens that for one reason or another you owe back taxes. The IRS can be relentless in their pursuit for payment.
Main Digest
Taxes
"The only thing certain is death and taxes" -Ben Franklin.
It may seem like filing for Bankruptcy would get the tax man off your back, but this is not necessarily the case. The Franchise Tax Board and the Internal Revenue Service really don't like to lose money.
How you can tell if your tax debt is likely to be discharged with a Chapter 7 bankruptcy? Here is a good rule of thumb. If you tax debt is more than 4 years old and was filed accurately and on time then those debts might be dischargeable. The final say is still given to the IRS or Franchise Tax Board. In conclusion, some tax debt is sometimes dischargeable -sometimes.
The Cost of an Education
Student loans are never dischargeable. If a loan was granted for the purposes of education then currently that debt can not be discharged under any circumstance. I say currently because our good President Obama has put in motion some changes that may help the next group of broke, but educated, post graduates. The Wall Street Journal recently reported that student loan debt has now surpassed credit card debt. One can only hope that soon a person struggling for financial freedom will be able to discharge these debts also.
Support Payments
Child Support and Spousal Support are never discharged with bankruptcy. Unless you can prove that you do not owe those debts, they are yours to pay. The law specifically states that all debts "to a spouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of such spouse or child..." will not be discharged in bankruptcy.
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Cite This Page (APA): Langtree, I. C. (2010, September 20 - Last revised: 2023, November 27). Taxes, Loans and Bankruptcy: Discharge or Non Dischargeable. Disabled World. Retrieved September 11, 2024 from www.disabled-world.com/disability/finance/discharge-non-dischargable.php
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