Personal Income Tax Debt And Bankruptcy

2010-03-19   minute read

Linda Paul


Debt Solutions

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

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. 

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