Will bankruptcy stop tax liens? 22 Answers as of July 04, 2013

My home that I have lived in for 2 years is worth $300,000 and I have a $450,000 mortgage on it. The IRS claims I owe $100,000 in back taxes. I have heard mixed advice and I want to know, will filing for bankruptcy prevent the IRS from taking my home under a chapter 13 filing?

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Dan Shay Law
Dan Shay Law | Daniel Shay
The IRS will not take your home b/c you file Ch13. You will have to pay all non-dischargeable taxes owed in the Ch13. Make sure the taxes are actually non-dischargeable. Do they meet the exception; 1. Filed on time or with an extension filed on time. 2. Over 3 years old 3. Not reassessed If these factors are met, the taxes are dischargeable.
Answer Applies to: California
Replied: 7/14/2011
David Hoines Law
David Hoines Law | David Hoines
Probably, but you need to consult with a bankruptcy attorney, as these matters are complex.
Answer Applies to: Florida
Replied: 7/12/2011
Mercado & Hartung, PLLC
Mercado & Hartung, PLLC | Christopher J. Mercado
Taxes over 3yrs old are dischargeable.
Answer Applies to: Washington
Replied: 7/4/2013
Law Office of Maureen O' Malley
Law Office of Maureen O' Malley | Maureen O'Malley
Sorry. Tax liens aren't stopped. But you'll be paying for it in Chapter 13, so that should keep them at bay.
Answer Applies to: Virginia
Replied: 7/11/2011
Bankruptcy Law office of Bill Rubendall
Bankruptcy Law office of Bill Rubendall | William M. Rubendall
If you file a chapter 13 bankruptcy you can do a tax payment plan. Tax liens are not removed in bankruptcy; they must be paid.
Answer Applies to: California
Replied: 7/11/2011
    The Law Office of Mark J. Markus
    The Law Office of Mark J. Markus | Mark Markus
    The bankruptcy won't get rid of the lien, but you will get rid of the underlying tax debt (either by paying it 100% if required, or by paying less and discharging the balance). Sometimes the IRS will voluntarily remove the lien if they don't think it will generate any return for them. You can request a release of the lien after the bankruptcy case is concluded. As far as them "taking your home" I doubt they would do that if there was no equity (they'd have to take it subject to the 1st mortgage), but you may want to discuss that with a tax attorney.
    Answer Applies to: California
    Replied: 7/7/2011
    Financial Relief Law Center
    Financial Relief Law Center | Mark Alonso
    Chapter 13 allows you to pay a portion of your debt over 60 months, and then typically whatever is not paid is discharged (if the debt qualifies for it). In your case, you must go through an analysis to determine if your tax debt is dischargeable ultimately, even if you're making some payments on it in the bankruptcy. In order for tax debt to be dischargeable ultimately, the following elements must be met: 1- the income tax return must have been filed 2- the income tax return must have been filed more than 2 years before the filing of the bankruptcy petition (if the taxes were filed late and within 2 years before the petition, the taxes will be priority and non-dischargeable). 3- in order to be dischargeable, the taxes must have been last due, including extensions, earlier than 3 years before the filing of bankruptcy petition. I would advise you to consult with a bankruptcy attorney regarding this situation, as some bankruptcy attorneys will simply say that taxes are not dischargeable in bankruptcy, which is not entirely accurate.
    Answer Applies to: California
    Replied: 7/7/2011
    California's Largest Family of Attorneys
    California's Largest Family of Attorneys | Doan Law Firm
    A chapter 13 may help, yes.
    Answer Applies to: California
    Replied: 7/4/2013
    Tucker Legal Clinic
    Tucker Legal Clinic | Samuel Tucker
    You state the IRS "claims" you owe them $100,000. Has a tax lien been filed? If the tax lien is filed, it is fixed and a bankruptcy won't help that; however, you can deal with it in a chapter 13 case. The advantage to you is that within the chapter 13 payment guidelines, you have control over the collection of the taxes, not the IRS. In the Ch13 you avoid wage garnishment and property seizure. The tax lien attaches ALL of your property not just your home. The larger problem I see is that you are so underwater with home mortgage.
    Answer Applies to: Mississippi
    Replied: 7/7/2011
    Breckenridge and Walton
    Breckenridge and Walton | Alan D. Walton
    First, the IRS will not take your home if you are underwater on it, they would get nothing. Second, if you wait long enough, you may be able to discharge the IRS claim. Third, a chapter 13 will give you breathing room, but if the debt is not dischargeable, you will still have to deal with whatever is left once the payment plan is over, but you will keep your home in the meantime.
    Answer Applies to: Michigan
    Replied: 7/7/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    Presently, there is no equity due to the amount owed to mortgage holder. The IRS isn't going to sell since it cannot receive anything from a sale, since it would have to pay off the lien holder first.
    Answer Applies to: California
    Replied: 7/7/2011
    Tomas Ayuban
    Tomas Ayuban | Tomas Ayuban
    Federal Tax liens are not dischargeable in bankruptcy. If you are fortunate enough to have tax debt that is eligible for discharge in bankruptcy and the IRS has yet to file a tax lien, you should file bankruptcy as quickly as possible before a lien is filed. I am assuming that the $100K you owe the IRS is from your 1040 personal taxes and not from employment/trust fund taxes that have been assessed personally against you. Trust fund taxes are not dischargeable in bankruptcy.
    Answer Applies to: Florida
    Replied: 7/7/2011
    Colorado Legal Solutions
    Colorado Legal Solutions | Stephen Harkess
    A chapter 13 plan which addresses the tax liens will prevent the IRS from taking your house. However, the IRS is not going to take a house in any event where the mortgage exceeds the value of the house.
    Answer Applies to: Colorado
    Replied: 7/7/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    Taxes are very difficult to deal with. Potentially they could be discharged. Would need more info.
    Answer Applies to: California
    Replied: 7/7/2011
    Law Office of Harry L Styron
    Law Office of Harry L Styron | Harry L Styron
    A Chapter 13 filing will prevent the IRS from seizing your home, but you will still owe the back taxes, penalties and interest. Why don't you negotiate with the IRS for a reduced amount before you file.
    Answer Applies to: California
    Replied: 7/6/2011
    William C. Gosnell, Attorney at Law
    William C. Gosnell, Attorney at Law | William C. Gosnell
    Yes a chapter 13 stops all creditors but that IRS lien does not go away. However you have too much debt to qualify for a chapter 13. Why would you pay 550,000 for a 300,000 house?
    Answer Applies to: Tennessee
    Replied: 7/6/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Chapter 13 stops the liens from attaching. In your case it sounds like there is nothing for the lien to attach to.
    Answer Applies to: California
    Replied: 7/4/2013
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    Without more details there is no way to fully answer you. The IRS will be limited as to what they can do to you during bankruptcy, but your plan also will need to address the tax debt. Since you have not told us all the details we can't tell you details as to how the case may help you.
    Answer Applies to: Georgia
    Replied: 7/6/2011
    Law Offices of Sanford I Millar, A Professional Corporation
    Law Offices of Sanford I Millar, A Professional Corporation | Sanford Millar
    The following is general information and does not constitute legal advice or the establishment of an attorney client relationship. A bankruptcy may discharge income taxes if the filing is 3+ years from the filing of a timely filed return or 2+ years from a late filed return. The discharge eliminates the debt, but if a lien was filed pre-bankruptcy then the lien stays on the property and if it is sold the proceeds beyond the senior debt go to the IRS.
    Answer Applies to: California
    Replied: 7/6/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    The IRS will not take your home since there is nothing to take. The mortgages are secured debts and you have no equity for the IRS to take.
    Answer Applies to: California
    Replied: 7/6/2011
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