Liens & Chapter 7 Bankruptcy
Nationwide Representation from Our Chicago-based Tax Attorney
If the taxes owed exceed the debtor’s property value, the lien may not be stripped down and the lien survives the bankruptcy. If the lien is not released, it remains.
Challenge the Validity of an Invalid Tax Lien
- Could be filed in wrong county
- Could be asserted against real property for taxes that were discharged
- Lien filed in the wrong name (corp. name rather than debtors)
- Lien may have been filed in violation of automatic stay
Local practice will determine whether a lien can be challenged by motion or by adversary.
Request a Certificate of Release from IRS
If taxes have been discharged and debtor’s assets are minimal, just request that the IRS release the lien; they often will.
Negotiate a Release for an Amount to Be Paid
Advise Client to Wait Out the Statute of Limitations
A tax lien is valid for 10 years from the date the taxes were assessed (not 10 years from date lien was filed).
Liquidate the Assets & Pay the Funds to the IRS
File a Chapter 13 & Pay the Value of the Asset
In Chapter 13, the debtor can strip down the lien to the value of the asset.
When you need help understanding what path may be right for you, our Chicago tax attorney is here to help. Call (800) 261-6671 now to schedule a consultation.
