In one of the most misunderstood aspects of bankruptcy, tax debt that is three years or older from the date of the last date the tax return was due (typically April 15 or October 15 of the respective year) are dischargeable as long as it is not the result of a trust tax (sales tax, payroll tax). The return must have been actually filed timely to be dischargeable as well. Why is it to your advantage to file bankruptcy over tax debts? By filing a Chapter 13 bankruptcy, you can stop future penalties and interest, freezing what you owe on the date you file. This could save you thousands of dollars in the long run and give you a chance to rebuild your credit and reputation.