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While credit card debt is a major reason people wind up filing for bankruptcy, you cannot file for bankruptcy on credit card debt alone, as the law requires that all your debts be listed in the bankruptcy documents.
You can wipe out or discharge tax debt by filing Chapter 7 bankruptcy only if all of the following conditions are met: The debt is federal or state income tax debt. ... You did not willfully evade paying your taxes or file a fraudulent return. ... Your tax debt is at least three years old.
In Chapter 7 bankruptcy, you sell off some of your assets to pay a portion of your debts, and the rest of the amount owed is discharged, which means it is erased. Chapter 7 bankruptcy is typically a highly effective way to get rid of credit card debt, but there are some exceptions.
You can only receive a chapter 7 discharge once every eight years. Other rules may apply if you previously received a discharge in a chapter 13 case. No one can make you pay a debt that has been discharged, but you can voluntarily pay any debt you wish to pay.
In a chapter 7 case, however, a discharge is only available to individual debtors, not to partnerships or corporations. 11 U.S.C. § 727(a)(1). Although an individual chapter 7 case usually results in a discharge of debts, the right to a discharge is not absolute, and some types of debts are not discharged.