Hello, my name is Quianna Ridalgo. I enjoy talking to others about bankruptcy case outcomes. Court officials handle each type of debt, from credit cards to home loans, differently. Debtors must carefully prepare themselves for the court proceedings to cope with the outcome appropriately. The way creditors handle the discharged debt also interests me. Bankruptcy attorneys assist their clients with each step of the bankruptcy process from filing paperwork to meeting with creditors. Debtors and creditors both receive counsel that helps them move forward appropriately at every point in the case. The information I share on my site may help you learn about everyone's role in these complex cases. Feel free to come by anytime to learn more information about this interesting subject.
Filing Chapter 7 bankruptcy is a good option if you want to get out of debt without repaying all the debts you owe, but it has limits. In other words, Chapter 7 bankruptcy will not usually eliminate all the debts you have, and it may not eliminate IRS tax liens you have on your house. Here are a few things you should understand if you have IRS tax liens on your house and are planning on filing for Chapter 7 bankruptcy.
You will have to pay the lien if you keep your house
The IRS has the right to place a lien on a person's house when the person does not pay taxes that he or she owes. In Chapter 7 bankruptcy, you may have the option of keeping your house or surrendering it to the trustee. If you are in a position where you can keep the house, you should know that you will be responsible to pay the tax lien the IRS placed on your house. You will not have to pay it until you sell the house at some point in the future, but it must be paid at that time. In other words, the bankruptcy will not help you remove this type of lien.
The bankruptcy may, however, help eliminate the tax debt you owe the IRS. Tax debts can be discharged through bankruptcy if they meet certain qualifications. The only problem with this is that even though this debt might be discharged, you will still be required to pay off the lien if you sell your home at some point.
If you owe back taxes and the IRS has not yet placed a lien on your home, you might be able to avoid repaying the debt altogether by filing for Chapter 7 right away. Once you do this, the IRS is not allowed to place a lien on your home.
You may have to pay the lien if you give up your house
If you decide to give up your home in your bankruptcy case, or if you are forced to, you will most likely get out of paying the tax lien yourself. When the trustee takes possession of your house, he or she will sell it. If there is money left from the proceeds after paying off your mortgage, the trustee may then issue a check to the IRS to pay off the lien. If there is no money left, the lien will not get paid, but you will never be responsible to pay for it. It will be as though it never happened.
Bankruptcy offers a lot of benefits and can be a helpful tool to use if needed. If you have questions about your personal situation, contact a bankruptcy lawyer today.Share