Tax Liens and House

[Dis0314]

I'm going through Chp7 right now and I am not reaffirming my house but I am staying and paying it timely.

How does this work with the IRS and them setting tax liens on the property for taxes I will owe? Since it's not my mortgage any longer can they?

I'm in Texas if that matters?

[LadyInTheRed]

Nothing will change with respect to the liens. The mortgage company will still have a lien against your home and if the IRS files a lien, nothing will be different from if you had not filed BK. The IRS does not place a lien on the mortgage, they place the lien on the property.

[Jongo]

IRS = not dischargeable. Except in cases where the IRS is truly the least of your worries. And that is rare. The liens will survive the BK, and so will the obligations. At any time that you seek to change anything to do with the disposition of the property - refinance, change names on the title or deed, etc - those lens will get first dibs. The federal government makes sure that they are the most exempt from any federal action that might damage themselves. Tax liens, federal student loans, federal ANYTHING is pretty much safe from any BK discharge.

[despritfreya]

You need to consult with a local bk attny. In general, the recorded tax lien attaches to everything you own including the clothes on your back. In the context of a bk, the taxing agency is secured by those liens but only up to the value of your equity in the property as of the day you file bk. The taxing agency's lien, just like any "consensual" lien, passes through the bk unaffected. However, depending upon the value of the property and the age of the tax and, whether or not you filed all returns, the IRS will work with you to pay the "secured" value and once so paid will release the recorded lien.

Because there are so many variables you really need to be working with a competent attorney. I hope you are.

Des.

[kerril]

My husband is going through the same thing right now! His 341 is next week and the taxes are over 3 years old so they can be discharged but that ugly lien is still there. Our attorney has given us different options to get the lien extinguished after the bankruptcy discharge but they involve a lot of hoping an praying and could potentially cost him 401k to make it go away as there is no equity in the house and that is his only asset. Thankfully, he just started a new job and should be able to build it back up quickly if that happens. It's no walk in the park, you have my sympathy. He's learned the hard way you cannot run from the IRS.