Do I have to pay taxes on any discharged debt?

Generally speaking, when you file for bankruptcy in Washington, any discharged debt is not taxable. This means that you are not required to pay taxes on any discharged debt. However, there are a few exceptions to this rule. The main exception to this is if the discharged debt was for a loan that you took out for personal expenses and the loan was not used for a business purpose. In those cases, the Internal Revenue Service (IRS) may consider the loaned money as income, and you may therefore be liable for taxes on the discharged debt. Additionally, if you receive a cash repayment from any creditor after your bankruptcy has been discharged, it may be considered income and thus be taxable. For most people, taxes on discharged debt should not be a concern. Make sure to consult a qualified bankruptcy attorney if you are unsure about your particular situation. An attorney can help you understand what debts you may be responsible for, and if they are subject to taxation.

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Do I have to pay taxes on any discharged debt?

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