You can get bankruptcy protection on some Income taxes and student loans.

Some Income Tax Debt MAY be dischargeable under Chapter 7 bankruptcy

if you meet very specific criteria.

  1. The taxes must be for INCOME.
  2. The Income Tax must have been due at least 3 years prior to filing for bankruptcy protection.
  3. The income tax return, even if filed late, must have been filed at least 2 years before filing for bankruptcy protection.
  4. The amount of income tax due must have been verified by the IRS at least 240 days before filing for bankruptcy protection.
  5. If the IRS determined that your tax return was fraudulent, or you were trying to “cheat” your, then they cannot be discharged.

Some Student Loan Debts MAY be dischargeable under Chapter 7 bankruptcy

If you meet qualify for an UNDUE HARDSHIP

There is not a clear test to determine if you qualify for an “undue hardship” that will eliminate your student loans.  You will need to provide proof and evidence to establish each of the following:

  1. You can’t maintain a basic standard of living if you had to pay back your student loans.
  2. You have to show that the hardship will last for a large portion of your payback period.
  3. You have made honest attempts to repay your student loans but are unable to do so.

A more detailed breakdown and discussion of this topic is available at the Us Department of Education’s Federal Student Aid office. Hyper link here. https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/bankruptcy.

The trust is that you would need an very clear, and extreme hardship that would allow  you to qualify for student loan discharge. Usually and almost a requirement, you will have had to suffer an injury or illness that makes it just about impossible for you to work.

However, if you are struggling with repaying your student loans and are considering bankruptcy, you should consult with an attorney because even if you cannot get a full discharge on your student loans, you may get a partial discharge reducing your debt. Or, you may get a restricted deal that makes paying your student loans more manageable.