Grammy winning singer files for personal bankruptcy
Grammy winner Dionne Warwick filed for personal bankruptcy recently, citing a tax debt of over $10 million that she is unable to pay with existing income and assets. Her spokesperson said that the debt was the result of financial mismanagement in the 1980s and 1990s.
At present, the singer’s income and monthly expenses are generally in balance, but she is without extra funds to contribute to this large tax debt. This situation is similar to many people who choose to declare bankruptcy when they find themselves in a stasis with present costs but unable to address past debts.
The singer’s representative said that Ms. Warwick’s taxes have been paid and that the remaining balance is comprised of fines and interest, which the IRS has continued to levy despite efforts on Ms. Warwick’s part to propose repayment plans.
This is a problem that many taxpayers encounter when they do not set enough aside in a given year to cover the bill that they discover in April. It is often possible to create a payment plan with the Internal Revenue Service and many people do so successfully, but as with any other loan or debt modification, there are no certainties that the request will be granted.
This story is all too familiar for many Atlanta readers who have struggled to resolve old debts or who have not had extra money available when tax season arrived. While this is a difficult situation to be in, it is important to remember that bankruptcy offers relief and a fresh start when debts become overwhelming and impossible to pay.
Source: Reuters, “Dionne Warwick files for bankruptcy, owed over $10 million,” David Bailey, March 26, 2013.
Information about tax debt relief is available on our website.
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