New York | Bankruptcy
4/12/04, 3:31 pm
Legal Question
Paying taxes on bankruptcy debt??
Sir or Madame,
My husband and I are currently in the process of filing personal bankruptcy. My husband is worried that we would have to pay taxes on the amount that is discharged as we would have used money that ''isn't ours'' (i.e. our credit card debt).
Given the amount of debt we have, he calculated approximately $8,000 that would have to be paid in taxes if what he read about today is correct.
He is somewhat confused as to what type of bankruptcy this would apply to, but it is not something I have ever heard of relative to a personal bankruptcy. Could you please shed some light on what taxes may need to be paid on a personal bankruptcy, if any? Thank you!
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