How Tax Debt is Treated in Bankruptcy
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A tax debt often takes a life of its own and the individual soon sees a snowball effect as the tax debt grows larger and impacts other areas of an individual's finances. Learn more about tax debt bankruptcy in Texas in this presentation.
Transcript of How Tax Debt is Treated in Bankruptcy
Debtor is required to file a repayment plan
Debts are categorized as priority, secured, or unsecured
Tax debts are a priority debt, meaning they are paid before other unsecured creditors.
Monthly payment based on income
Other debts may be discharged upon successful completion of the repayment plan
Chapter 12 is used by a family farmer or fisherman
Chapter 11 is used by an incorporated business or an individual debtor whose debts exceed the chapter 13 limit
