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

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.

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Attorney answers 4


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.


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 cannot be used by any taxpayer for the purpose of avoiding any IRS or NYS penalty. The information contained herein is for informational purposes only as a service to the public, and is not legal advice or a substitute for legal counsel, nor does it constitute advertising or a solicitation. This response is not intended to create, and does not create, an attorney-client relationship between you and the author.


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.


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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