If i have a Federal Tax Lien will that affect my Chapter 7 Bankruptcy

Asked about 1 year ago - Sylvania, OH

Im wanting to file a chapter 7 bankruptcy due to taxes that will be dis chargeable but the taxes i need to file on are associated with a federal tax lien.

Attorney answers (4)

  1. Scott Benjamin Riddle

    Pro

    Contributor Level 20

    5

    Lawyers agree

    Answered . You need to make an appointment with a lawyer or two fairly quickly to review all the facts and details and get a plan going forward. The lien may certainly be a problem for you, but it depends on many other facts we don't have.

  2. Matthew Scott Berkus

    Contributor Level 20

    5

    Lawyers agree

    Answered . The lien is a problem. The lien turns otherwise dischargeable tax debt into non-dischargeable secured debt.

    You could certainly benefit from a tax discharge analysis so you can fully understand your options and plan your eventual bankruptcy. See the link below.

  3. Gregory David Verdibello

    Contributor Level 10

    4

    Lawyers agree

    Answered . The lien will cause a problem if, for example, you have equity exempt assets (such as a 401(k) or equity in your home) that survive your bankruptcy discharge. The IRS could pursue those assets after bankruptcy. You should contact an attorney that has experience in both the areas of tax and bankruptcy.

    This material does not constitute tax, legal or accounting advice. It was not intended or written for use and... more
  4. Dorothy G Bunce

    Pro

    Contributor Level 20

    Answered . It will depend on the assets you own. My biggest case to discharge tax debt came when my client had a tax lien and nothing but the clothes on his back. State and federal exemptions do not affect an IRS lien, so what may be good for some could be really bad for you. What have you got? Hope this perspective helps!

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