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A tax debt owed for payroll taxes, FICA (Social Security) taxes, and trust fund taxes are not dischargeable through any type of bankruptcy proceeding, including Chapter 7.
If you still owe taxes at the end of your repayment plan, you will be responsible for paying them in full. Any remaining tax debts will not be discharged, and you will still be liable for paying them.
Under Chapter 7, you may lose the first tax refund that's due after discharge, or some of it, because it's a refund of money earned before discharge. If some of the refund is from income earned after filing for bankruptcy, you keep it.
Dismissal: IRS may keep payments, and time in bankruptcy extends time to collect remaining tax liabilities. Discharge: Will eliminate (discharge) tax debts paid in the plan and tax debts older than three years unless returns filed late. Debtor must timely file income tax returns and pay income tax due.
Bankruptcy Can Wipe Out Credit Card Debt and Most Other Nonpriority Unsecured Debts. Bankruptcy is very good at erasing most nonpriority unsecured debts other than school loans. For instance, you can discharge unsecured credit card debt, medical bills, overdue utility payments, personal loans, gym contracts, and more.