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Is the debt discharged in bankruptcy considered income that has to be reported on my income tax return?

Our Professional Answer:

Bankruptcy will discharge every debt you have a legal obligation to pay. One of the concerns that most people have is that when they discharge a debt in bankruptcy that they’re going to receive a 1099 from the credit company, such that they’re going to have to report the discharged debt to the IRS. That couldn’t be farther from the truth. Debt discharged in bankruptcy is not taxable income to you and never will be.