Re: Tax Liens and Chapter 7 Bankruptcy

You really need counsel for a case this complex. Here are a few thoughts, but keep in mind that every case is different, that there are exceptions to the exceptions to the rules, and that without a full analysis of your situation, no one can give you competent advice (other than, again, to get a lawyer). A lawyer may well save you more than you have to pay.

1. It would be a very unusual situation where anyone would want tp reaffirm a car loan in MD. You can keep the car by keeping up the payments, and then if something happens later where you can't or decide you don't want to keep up the payments (i.e., the car breaks down or is damaged, with repair costs exceeding value), you cannot be held liable for the deficiency.

2. 2000 income taxes are now dischargeable if timely filed non-fraudulently and no assessment within 240 days. The lien means they are secured, but not that they are non-dischargeable. You will need to determine if the Comptroller will release the lien and what assets you have that it attaches to in order to assess what liability would survive the BK filing.

3. Depending on the circumstances, you may want to do an offer in compromise either before or after the bankruptcy filing, depending on what assets the lien attaches to and whether it is likely just to be released by the Comptroller if you file. This takes careful analysis, and may itself be well worth the legal fee.

4. The automatic stay does apply to efforts by the state to enforce the lien.

5. You have to schedule all debts, dischargeable or not, in your bankruptcy. You are swearing under penalty of perjury that your schedules are accurate, and willful failure to list a creditor is bankruptcy fraud.

Re: Tax Liens and Chapter 7 Bankruptcy

Liens survive a bankruptcy discharge as a claim on the property encumbered by that lien. Whether the tax is "dischargeable" is a separate question. However, the Maryland Comptroller's Office has a policy of releasing liens filed with respect to discharged tax debts, so if the underlying tax is dischargeable, they will probably release the lien, even though as a strict matter of law they would not have to do so. Before you do any of this (and I do NOT recommend that you handle this on your own), you need to read the article on discharging taxes in bankruptcy on my website (www.bjhaynes.com). It was written for the Maryland Society of Accountants, but with some effort you should be able to get through it. But again, this really is not something to do without competent counsel.