Does a prepetition IRS lien for income taxes that are discharged attach to postpetition property?

Asked almost 2 years ago - Long Beach, CA

Does a prepetition IRS lien become attached post-discharge to 1) prepetition property or 2) to newly acquired property 3) or both 4) or neither one where all the income taxes were discharged in the bankruptcy proceeding? Thank You

Attorney answers (3)

  1. Brian Crozier Whitaker

    Contributor Level 17

    7

    Lawyers agree

    Best Answer
    chosen by asker

    Answered . Unfortunately, the lien remains (even if all the taxes were discharged) and a tax lien is not avoidable (as in the case of involuntary judgment liens). However, the lien will likely NOT attach to property acquired post-petition because that would be tantamount to attempting to collect a discharged debt in violation of the discharge injunction.

  2. Brad Francis Weil

    Contributor Level 11

    2

    Lawyers agree

    Answered . If the taxes were a lien before the filing of the Chapter 7 then the lien is not discarged so that will remain a lien against any property post petition. If the taxes were priority non-discarged then they can still attache to post peition property. You may want to consider a Chapter 13 to repay any nondiscarged or secured tax liability over time.

  3. William James Waters

    Contributor Level 14

    2

    Lawyers agree

    Answered . The first question that comes to my mind after reading your question is - how can you be sure the taxes were in fact discharged in the bankruptcy proceeding? Tax debts do not get discharged just because they are listed in the bankruptcy. They are very difficult to discharge unless very specific criteria is satisfied concerning the tax year involved, the date the tax return was filed, the date the tax was assessed, whether there have been any "tolling" events, such as a pending offer in compromise, and many other factors. If in fact the taxes were dischargeable, then a separate motion should have been filed to avoid and remove the tax lien. Fo you to have supposedly "discharged" tax debt, but an IRS lien that remains, makes me think that maybe the tax debt hasn't actually been discharged. Have you called the IRS Insolvency section to inquire as to the status of the discharge?

    If somehow the tax debt has gone away, and you did not get the tax lien removed, then I believe it will remain in place as a lien against any & all of your property, whether pre- or post-petition property. However, normally any lien that is associated with discharged tax debt will automatically be removed by the IRS. In other words, if they are in agreement that the underlying tax is dischargeable and in fact has been discharged, then any lien that relates to those discharged taxes will be removed. If this is your situation, but they haven't removed the lien, then call the IRS Insolvency section and request they remove their lien.

    Unfortunately, however, my guess is that when you call you will find out that the lien remains because the tax debt has not in fact been discharged.

Related Topics

Bankruptcy

Bankruptcy is a legal way for people or businesses who are no longer capable of paying back their bills to clear these debts and start over.

Debt

There are different types of debt, but all involve one person (the debtor) owing money to another (the creditor). Terms of repayment are governed by a contract.

Can't find what you're looking for? Ask a Lawyer

Get free answers from experienced attorneys.

 

Ask now

24,657 answers this week

2,988 attorneys answering

Ask a Lawyer

Get answers from top-rated lawyers.

  • It's FREE
  • It's easy
  • It's anonymous

24,657 answers this week

2,988 attorneys answering