income tax

Rudy Giuliani files for bankruptcy following $146 million defamation suit judgment

Former New York City mayor and Donald Trump attorney Rudy Giuliani filed for bankruptcy Thursday, according to a court filing. 

Giuliani filed for Chapter 11 bankruptcy less than a week after a jury ordered him to pay $146 million in damages to Fulton County election workers Ruby Freeman and Shaye Moss, who sued him for defamation. He estimates his liabilities are between about $100 million and $500 million. The damage award was originally set at $148 million, but the federal judge presiding over the case later reduced it to $145,969,000.

“This maneuver is unsurprising, and it will not succeed in discharging Mr. Giuliani’s debt to Ruby Freeman and Shaye Moss,” Michael Gottleib, a lawyer for the two women, said in a statement.

On Wednesday, Judge Beryl Howell of the U.S. District Court for the District of Columbia, ordered Giuliani to compensate the pair of election workers immediately, expressing concern that he may have been dishonest about his finances and that he might not comply with the judgment.

Giuliani had falsely claimed in the wake of the 2020 presidential election that the election workers engaged in a fake ballot processing scheme. His attorney recently signaled that his pockets weren’t deep

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January 3, 2024 by ATTORNEY

Can you use bankruptcy to clear tax debt?

When outstanding tax debt becomes overwhelming, you should weigh all of your options. There are two main types of bankruptcy you can use  to discharge tax debt, but it’s important to work with legal and financial professionals to determine the best course of action for your specific situation. 

What is bankruptcy?

Bankruptcy is a legal process that helps you deal with debt you cannot pay off, but it should be considered an option of last-resort since it comes with significant trade-offs and is only available if you meet certain requirements. 

Even if you qualify, it’s not an easy fix. Rather, you’re in for a long ordeal that will, hopefully, allow you to satisfy your debts either by liquidating assets or enrolling in a payment plan with creditors. 

There are two primary types of bankruptcy: Chapter 7 and Chapter 13. 

Chapter 7 bankruptcy 

In Chapter 7 bankruptcy, a trustee takes control of your assets and tries to sell them to make your creditors whole. You may be allowed to retain some of your assets.

Typically, whatever debt remains would be forgiven. In order to qualify for this type of protection, you need to pass a means test proving that you are

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November 24, 2023 by ATTORNEY

Bankruptcy Court Holds EITC Refunds Are Not Exempt From Creditors In Bankruptcy

The intersection of taxes and bankruptcy present interesting issues. A recent bankruptcy case demonstrated this by considering whether Earned Income Tax Credit refunds (and their New Mexico state equivalents) can be exempt from creditors in a bankruptcy proceeding. The case shows how the answer can depend on where you live! In this case, under New Mexico law, the bankruptcy court held that these refunds were not generally exempt from creditors.

In the case, the debtor was entitled to tax refunds, which were in part attributable to the Earned Income Tax Credit (EITC) and a New Mexico version, the Working Families Tax Credit. As the court explained, these credits are “intended to provide economic relief to low-income heads of household who work.”

The debtor listed the tax refunds under the state’s “wildcard” exemption, which allows a debtor to choose what property to exempt; however, the wildcard exemption here had a limit of $500. The bankruptcy trustee eventually objected to the claimed exemptions to the extent they exceeded the $500 limit.

This post will consider two of the arguments made in response to the trustee’s objection. First, that the EITC tax refunds were not part of

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January 2, 2023 by ATTORNEY
April 2024
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