Student Loans, Taxes Can Be Dischargeable

In the article “Swamped By Debtors and Abuse” (Jan 12), it was stated that student loans and income taxes are not dischargeable in a bankruptcy. While generally true, time does turn both student loans and IRS debts into dischargeable debts.

Student loans are eligible for discharge seven years after the repayment date takes effect. Taxes are dischargeable three years after the due date of the return (with extensions), or two years after they are filed, or 240 days after they are assessed, whichever is later. Please note that the returns must have been filed.

Many tax debtors haven’t filed, even though the IRS has made an assessment. Those taxes are not dischargeable until the return is filed and two years have gone by. The only exception is that a fraudulent tax return is never dischargeable.

If enough time has elapsed, then most tax debts are dischargeable, and bankruptcy may resolve insurmountable problems for the debtor.

RICHARD S. SCHONFELD

The writer is a certified public accountant in Sherman Oaks.