tax debt

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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Why RHOA’s Kim Zolciak and Estranged Husband Kroy Biermann May ‘Need to File for Bankruptcy’

Why RHOA’s Kim Zolciak and Estranged Husband Kroy Biermann May ‘Need to File for Bankruptcy’

Kim Zolciak-Biermann and Kroy Biermann’s biermann-split-again-after-calling-off-divorce/” data-ylk=”slk:divorce is back on;elm:context_link;itc:0″ class=”link “divorce is back on — and lawyer Neama Rahmani wouldn’t be surprised if the duo’s troubled finances are the reason for their split.

“There’s a lot that’s going on here, but obviously financial problems are one of the number one reasons why people do get divorced,” Rahmani exclusively told Us Weekly during a Tuesday, August 29, interview on the “Legally Us” podcast. “That [puts] a lot of pressure on relationships, so that may be one of the things that’s going on here behind the scenes.”

Rahmani, who is not working with Zolciak-Biermann, 45, or Biermann, 37, on their divorce, went on to note that he’s confused as to why the estranged couple hasn’t yet filed for bankruptcy amid their money troubles.

“I’m really surprised at how they’ve handled this, both in terms of the family side and the potential bankruptcy,” he told Us. “It seems like these two need to separate, need to file for bankruptcy, really start their life over — both their personal and professional life, because everything just seems like a mess right now.”

Why RHOA’s Kim Zolciak and Estranged Husband Kroy Biermann May ‘Need to File for Bankruptcy’

Kim Zolciak, Kroy Biermann Getty Images(2)


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