I currently owe $400,000 in past due taxes along with a government lien. How or will filing for chapter 7 bankrupcy help my financial situation. If we sold everything we own,including the house, its only about $140,00 total. Thank you for your time and helping with these legal answers. (fyi) I'm disabled(on ssi) and my wife works part time.
1 Answer from Attorneys
A tax lien would survive the bankruptcy discharge, but your personal liability for the taxes might be dishcarged. Whether they would or would not be discharged turns in large part on three time-period tests found in sections 507(a)(8) and 523(a) of the Bankruptcy Code. You can read the article I wrote on this subject for the Maryland Bar Association in the articles section of my website at www.bjhaynes.com.
The IRS's reach is in a practical sense limited to the value of your assets. After your discharge is entered, and assuming the taxes are dischargeable (see above), you could negotiate the release of the lien for an amount based on the value of the pre-petition assets, with an appropriate discount.
Let me know if you need assistance with this.
Related Questions & Answers
I want to place my home that I own into a Living Trust, however, I do not want to... Asked 8/22/09, 8:50 pm in United States California Tax and Taxation Law
Will a successful offer in compromise remove a $309,000 tax lien? thanks Asked 8/20/09, 12:03 am in United States California Tax and Taxation Law
Do you have to fill out a w9 form to received money from an inheritance? Asked 8/10/09, 10:55 pm in United States California Tax and Taxation Law
We purchased a home in Santa Clara County, CA in Nov. 2008. we set up our mortgage... Asked 8/10/09, 9:11 pm in United States California Tax and Taxation Law
I am going to be establishing an intra family mortgage. My parents are loaning me... Asked 8/04/09, 2:38 pm in United States California Tax and Taxation Law