Bankruptcy Discharge of Credit Card Debt Used to Pay Taxes

A caller asked me if he could discharge in bankruptcy a credit card charge of $10,000 used to pay property taxes on commercial real estate. The general rule is that all credit card debt and other unsecured debts are dischargeable in Chapter 7 bankruptcy. However, Section 523 of the Bankruptcy Code provides for exceptions. One the exceptions is certain income tax and property tax which are "priority" debts. The Bankruptcy Code does not permit a debtor to discharge credit card debt incurred to pay non-dischargeable taxes. In other words, the Code does not allow people to convert non-dischargeable property tax or income tax into unsecured credit card debt to be wiped out as part of general unsecured debts.