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Impact on next tax year after Ch 7 BK?

audio-disabled
Regular Contributor

Impact on next tax year after Ch 7 BK?

I have done some research on how may bankruptcy impact my next year's tax returns.

 

From what I understand, I will receive certain forms that will be considered taxable income?

 

So does that mean, from my single full time job, I have a salary of $30k a year.

 

These are the following debt that was discharged:

Total credit cards: $5k

Navient charged off: $18k

Auto loan: $30k

Personal loan: $2k

 

So altogether, the debt is $55k.

 

Does that mean my reporting income will be $85k? 

 

If I am wrong, then can someone explain to me how will it impact my tax return? Because if it does, I'd like to be prepared to owe tax for year 2017?






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SteelerNYC
Valued Contributor

Re: Impact on next tax year after Ch 7 BK?


@audio-disabled wrote:

I have done some research on how may bankruptcy impact my next year's tax returns.

 

From what I understand, I will receive certain forms that will be considered taxable income?

 

So does that mean, from my single full time job, I have a salary of $30k a year.

 

These are the following debt that was discharged:

Total credit cards: $5k

Navient charged off: $18k

Auto loan: $30k

Personal loan: $2k

 

So altogether, the debt is $55k.

 

Does that mean my reporting income will be $85k? 

 

If I am wrong, then can someone explain to me how will it impact my tax return? Because if it does, I'd like to be prepared to owe tax for year 2017?


No impact on your taxes for debt discharged in BK.

 

(In cases where there is not a BK and debt is settled for less than the amount owed, there can be tax implications. This is probably the info you stumbled upon.)

Ch 7 Discharge May 2015
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