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Do I Have to Pay Taxes if I File Bankruptcy?

What is forgiveness of debt income? When you owe money and do not pay the full amount of the debt the lender is required to file a 1099 form with the IRS showing that you had phantom income in the amount the creditor forgave.  This is referred to as ‘forgiveness of debt’.

Disabled Can Now Avoid Taxes When Student Loans Forgiven

After January 1, 2018 borrowers whose student loans are forgiven due to “total and permanent disability” no longer have to pay federal income taxes on those forgiven loans.