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Levitt & Slafkes, P.C. - Essex County Bankruptcy Attorneys

Get The Fresh Start You Deserve

Levitt & Slafkes, P.C. - Essex County Bankruptcy Attorneys
GET THE FRESH START YOU DESERVE

Bankruptcy &
Debt Relief For
Individuals and
Businesses

Chapters 7, 11
and 13

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Foreclosure
Defense &
Mortgage
Litigation

Saving Homes
Fighting Banks

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Loan
Modifications

Preventing
Foreclosure

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Commercial and 
Bankruptcy
Litigation

State Federal &
Bankruptcy Court

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Bankruptcy & Debt Relief For
Individuals and Businesses

Chapters 7, 11 and 13

Find Out
More

Foreclosure Defense &
Mortgage Litigation

Saving Homes Fighting Banks

Find Out
More

Loan Modifications

Preventing Foreclosure

Find Out
More

Commercial and Bankruptcy
Litigation

State Federal &
Bankruptcy Court

Find Out
More

Tax Liens in a Personal Bankruptcy

| Sep 5, 2014 | Bankruptcy Basics |

If you have tax liens recorded against you and you are considering filing a personal bankruptcy, it is important to understand how they will be handled in your case. Your personal liability to pay the tax lien is discharged in your bankruptcy filing; however, the lien is still valid.

What does this mean? In short, the creditor holding the lien cannot use collection efforts (lawsuits, garnishments, etc.) against you to satisfy the debt. Additionally, discharged tax lien creditors cannot pursue assets that you acquire after the bankruptcy. So, if your bankruptcy discharge applied to older taxes, the taxing authority cannot garnish your future paychecks.

However, a lien against your property may survive the bankruptcy. A properly perfected tax lien can attach to all of your personal and real property in the county where it is recorded. The important determination is how valuable the property is that the lien attaches to. The IRS will not expend the time and money to pursue a tax sale if the property has only minimal value, which is often the case.

It is also important to note that tax liens expire. The statute of limitations for most federal tax liens is 10 years from the date the tax was assessed (not the date the lien was recorded). As a result, many people rely on the passage of time to resolve their tax lien after a bankruptcy filing. It may also be possible to negotiate the release of the lien for a small settlement payment.

If you are interested in learning how filing a bankruptcy case can benefit you, contact Levitt & Slafkes, P.C., at 973-323-2953. You can also reach us by filling out our online form. We represent debtors in Chapter 7, Chapter 13 and Chapter 11 filings. Let us help you get the fresh financial start you need today.

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