Taxes and Student Loans in a Kansas Bankruptcy

In Kansas, as in most jurisdictions, student loans are more difficult to discharge than taxes. Only if a person is disabled or has some other drastic “undue hardship” can student loans be discharged in a bankruptcy. This applies for co-signed student loans and student loans directly from the school.

Taxes can be discharged if they are income taxes and they are more than 3 years old. The three years have to run from the date the tax return was due (usually April 15) and they have to have been paid timely. If the taxes owed are for employees wages or for sales tax they are likely non-dischargeable, but some interest and penalties can be discharged in a chapter 13 (monthly payments) bankruptcy. If the tax return was filed late, then the time frames will run from when the return was filed. Sometimes the actual time frame for determining when the taxes are payable is fairly complicated to compute, and legal counsel is vital.


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