Bankruptcy Law Questions? Ask a Bankruptcy Lawyer.
Hello, and thank you for contacting the Just Answer team.
What type of bankruptcy are we talking about? Is it a chapter 7?
I'm sorry, I meant a chapter 11?
It is a chapter 7
Yes, if a debt is discharged in a chapter 7 bankruptcy you can generally consider it a loss and as such you can take a deduction on the loss.
I believe it is called a "short-term capital loss", and can be taken as an itemized deduction.
In such a case, to make sure that it is being reported properly, have a certified public accountant review your tax filings prior to filing your return.
Also keep in mind that a capital loss is reported on schedule "D", form "1040".
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