Chapter 13 or 7 to discharge income tax debt and lien, can i keep my practice and at least one home?

Asked almost 2 years ago - Moline, IL

I have a lien in the amount of 278k including penalty & Interest. I am making all payments on this balance, but have an over eager IRS agent not willing to back down. If I file chapter 13 in Illinois how does this affect my business? can i keep my practice and one home ? I have enough assets, (not cash) to pay this balance in full, the IRS wont back off so that i can access them. I am concerned that they will attempt to grab my property or business if i don't move first to protect myself. I make well over 100k each year, and am also considering chapter 7 to erase this debt will my income disqualify me? I am looking for a good Tax/bankruptcy attorney in Illinois to assist me with this, what can i expect in terms of time if I need to move ahead of them. Thank you

Attorney answers (3)

  1. Mazyar Malek Hedayat

    Contributor Level 13

    7

    Lawyers agree

    1

    Answered . You ask whether a Chapter 13 reorganization can help you keep your practice, as well as keeping the IRS (and presumably Illinois Dept. of Revenue) at bay. Your question also asks if you qualify to file Chapter 7 liquidation. The answer in both cases is "maybe." Why not a definite yes or no? Because the facts of your situation will make the difference. These considerations include how much of your debt is secured, how many people live in your household, whether others in your household make an income, and if so how much, whether your practice is organized or operates as a sole proprietor, etc. Feel free to contact us for a consultation in which to discuss your case in more detail. I look forward to speaking with you.

  2. Dorothy G Bunce

    Pro

    Contributor Level 20

    8

    Lawyers agree

    Answered . If you are looking to find a tax/Chapter 13 attorney in your community, may I suggest using the "Find a Lawyer" search feature here on Avvo.

    Based on what you are describing, the think Chapter 13 could be a very effective way to manage the repayment of your IRS lien, but my one concern is that you might be over the debt limit of Chapter 13, which is $360,476 for unsecured debts & $1,081,400 for secured debts.

    Hope this perspective helps!

  3. Kathryn Ursula Tokarska

    Contributor Level 16

    4

    Lawyers agree

    Answered . Your best bet is to get a consultation with a bankrutpcy attorney in your local area. They can interatively answer your questions by asking other pertinent facts. Most BK attorneys provide free one hour consultation.

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