What Happens to a Tax Lien When Bankruptcy is Filed?

Your Tax Lien After Your Bankruptcy is Filed

When you file bankruptcy,
the automatic stay goes into effect which stops collection attempts from creditors. Yet,
this may have a different effect on a tax lien depending on your situation.
A tax lien is when a taxing authority, such as the Internal Revenue Service
(IRS) or state government, places a lien on your property for failing
to pay outstanding taxes due.

The lien allows the taxing authority to use your property to satisfy taxes
due after selling your property. You may have a lien placed on the property
in question if you owe property taxes. Or, the taxing authority who is
owed taxes may take additional steps to get a lien if you owe state or
federal income taxes. When it comes to bankruptcy, you may need to determine
whether the
tax debt in question qualifies for discharge.

This can be complex situation depending on what type of tax debt you owe,
how old the debt is, and when you file your petition. In some cases, you
may file for protection before the lien is issued against you. In this
case, if a lien is issued it violates the automatic stay. Tax debt may
be eligible for discharge but it depends on whether it meets qualifications
according to the bankruptcy code. Getting the debt wiped out in bankruptcy
may depend on when it was due and whether it has been accessed by the
IRS. Discuss your situation with an experienced Dallas-Fort Worth bankruptcy attorney.


By | 2017-12-13T00:28:01+00:00 July 19th, 2013|Debt and Tax Relief|Comments Off on What Happens to a Tax Lien When Bankruptcy is Filed?