Chapter 13 can prevent income tax liens on dischargeable taxes. But it’s riskier. It takes years, and you may pay some of that tax. Two weeks ago we showed how the filing of a bankruptcy case stops the recording of an income tax lien. A bankruptcy filing imposes the “automatic stay.” That law makes it illegal for the … Read More
Chapter 7 can effectively prevent income tax liens if it’s filed before a tax lien is recorded and the tax qualifies for bankruptcy discharge. Last week’s blog post was about filing bankruptcy to prevent the IRS/state from recording income tax liens on your home. The “automatic stay”—bankruptcy’s broad freeze of creditor collection actions—stops tax lien recordings immediately when you … Read More
Bankruptcy can protect your home from income tax liens. In the right situations you pay nothing on the tax, instead of needing to pay it all. Income Tax Liens Are Dangerous Our last two blog posts were about judgment liens. First was about how filing bankruptcy can sometimes remove, or “avoid,” a judgment lien from your home. Second … Read More
If Chapter 7 doesn’t write off enough another debts so you can afford to pay the tax, Chapter 13 gives you much more time and protection from the tax lien. Last week we discussed how Chapter 7 handles a recorded tax lien on a tax that bankruptcy CAN’T discharge. The tax debt already can’t be discharged (legally written off in bankruptcy). … Read More
Filing a Chapter 7 case stops a tax lien recording on your home, and so may stop that tax from turning into one you must pay. Our last blog post was about how filing a Chapter 7 case buys you time with debts on your home. It’s worth expanding on one of those Chapter 7 benefits, one that can … Read More
A tax lien fully encumbered by the equity in your home is dangerous. Chapter 13 may be your best option.