How to File Bankruptcy on Tax Liens
When the IRS secures the amount of outstanding amounts owed by placing a hold on your property, it is called a tax lien. In some cases, bankruptcy may enable you to discharge these debts; however, in others you may be required to pay the amount in full. The only way you will know what is required is to file for bankruptcy on these liens.
- Collect all of your bills, pay stubs, account statements, tax information and asset information. You will also need the contact information for all of your creditors, such as the IRS, your credit card companies, and your mortgage company.
- Arrange a meeting with a bankruptcy attorney. The attorney will help you to determine which type of bankruptcy you can file for. Your options for bankruptcy are a chapter 7 bankruptcy or a chapter 13 bankruptcy.
- Bring all the information you have collected to the meeting with your bankruptcy attorney.
- Draw up a bankruptcy petition with the help of your attorney. You will need to list the IRS as a potential creditor on your bankruptcy matrix. By doing this, the IRS will be notified that you are filing and they will need to put in a claim with the bankruptcy court.
Additional Information
- In many cases, the bankruptcy court may consider the tax lien to be a secured debt. Because of this, the tax lien may need to be paid in full by you as a part of your bankruptcy plan.
- Chapter 7 bankruptcy involves the process of paying off creditors through estate liquidation.
- Chapter 13 bankruptcy involves regular payments paid to a trustee over the period of 3 to 5 years.