Personal Bankruptcy Discharging tax liens in bankruptcy....

[seniorjudge]

In a consumer bankruptcy, is the debtor relieved of state tax liens? Federal tax liens?

(I will be the first to admit that I know nothing about bankruptcy; if I haven't given you enough info, ask me. Thanks.)

 

[Michael Wechsler]

In a consumer bankruptcy, is the debtor relieved of state tax liens? Federal tax liens?

(I will be the first to admit that I know nothing about bankruptcy; if I haven't given you enough info, ask me. Thanks.)

I'll admit I'm no expert either but I did deal with bankruptcy court for a short time, right after the dot com bust and we had to deal with dozens of bad debts and bankrupt companies... but this question brings back memories of of an old estate case I dealt with a while ago.

I believe that personal income taxes may be dischargeable under Chapter 7 provided that requirements are met, e.g. good faith, return filed, assessment made and I think the tax debt had to have been for a return for a few years prior to the filing for bankruptcy (can't just run to erase your current liability.) Where all this came into play is that if the tax lien was recorded then you've still got problems, e.g. if the lien is recorded against a home, then those taxes must be paid.

Link to IRS Site for Bankruptcy

I'm sure someone has covered this article in detail somewhere...