Personal Income Tax Debt And Bankruptcy
Yes, personal income tax debt is included in a bankruptcy and, in most cases, is treated just like any other debt such as a credit card or bank loan.
![Person at a coffee shop holding their cellphone and a credit card](/-/media/images/mnpdebt/consumer/blogs/bankruptcy/shutterstock_435536971-jpg.jpg)
If you owe more than $200,000 in tax debt and if the tax debt is 75% or more of your total debts, you wouldn't qualify for an automatic discharge (The discharge is what you receive when you finish your bankruptcy. It means that your debts are extinguished.) - your discharge from bankruptcy would be decided on in a court hearing instead of it just being automatic.