Popular singers can raise the roof with soaring melodies, make us smile with charming lyrics and break our hearts by singing the beautiful ballads. Dionne Warwick has touched many people throughout the decades through her musical creations. Unfortunately, her recent encounter with bankruptcy will most likely leave her singing the blues.
The 72-year-old performer filed for bankruptcy in New Jersey after claiming to have received poor financial advice in the 1990s. The "Do You Know the Way To Santa Jose" crooner owes millions in back taxes both to the federal government and to the state of California. Though she has paid back the amount due in actual taxes, the interest and penalties that accrued still impose great burdens.
Unpaid taxes and the resulting penalties force many people to turn to bankruptcy each year. Though arrangement can be made so that more manageable payments can be made after one files for bankruptcy, taxes are one type of debt that cannot be wiped out by bankruptcy proceedings. The same is true for student loans, child support and alimony.
Under Chapter 13 bankruptcy, a person is allowed to keep his or her property and stop repossession, but a payback plan is established and must be followed. A chapter 7 bankruptcy, on the other hand, is when a bankrupt person's property is sold and the resulting proceeds are used to pay the debt owed. Bankruptcy attorney understand the best options for each person's unique tax situation and can provide custom advice in the best route to take.
Warwick can use all the advice she can hear at the moment, and it remains to be seen what type of bankruptcy path she will follow. It may behoove her to say a little prayer to help get her out of this tough situation.
Source: Federal News Radio, "Singer Dionne Warwick files for bankruptcy in NJ," March 27, 2013