The IRS often files tax liens on property. The lien is extended to all property in the county in which it is filed. The tax lien applies your house and all your personal property. The lien is good for 10 years
IT IS POSSIBLE TO AVOID THE IRS TAX LIEN IN TOTAL
An example is that the market value of the house is $200,000 and the 1st mortgage balance is $175,000 and the 2nd mortgage balance is $30,000. The IRS lien can be avoided in its entirety.
WHAT IF AFTER DEDUCTING SENIOR LIENS THERE IS STILL SOME VALUE.
What if the value is $210,000 while the mortgage balances are only $205,000? Then $5,000 on the IRS tax lien has to be paid 100% in a Chapter 13 case and the balance is an unsecured debt.
Unlike the case of avoiding judgment liens, the homestead exemption cannot be exerted.
POSSIBLE PROBLEM WHEN AVOIDING IRS LIENS
The debt attached to the lien might be a claim that is not dischargeable. This might apply if the tax lien was for a recent tax year or if the tax liability was for payroll taxes.
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