LIENS AND CHAPTER 7

  • If the taxes owed exceed the debtor’s property value, the LIEN MAY NOT BE STRIPPED DOWN.
  • The LIEN SURVIVES THE BANKRUPTCY.
  • If the lien is not released, it remains.

CHALLENGE THE VALIDITY OF AN INVALID TAX LIEN.

  • Could be filed in wrong county:
  • Could be asserted against real property for taxes that were discharged.
  • Lien filed in the wrong name (corp. name rather than debtors.)
  • Lien may have been filed in violation of automatic stay.

 

  • LOCAL PRACTICE WILL DETERMINE WHETHER A LIEN CAN BE CHALLENGED BY MOTION OR BY ADVERSARY.
  • REQUEST A CERTIFICATE OF RELEASE FROM IRS.
  • If taxes have been discharged and debtor’s assets are minimal, just request that the IRS release the lien; they often will.
  • NEGOTIATE A RELEASE FOR AN AMOUNT TO BE PAID.
  • ADVISE CLIENT TO WAIT OUT THE STATUE OF LIMITATIONS
  • TAX LIEN IS VALID FOR 10 YEARS FROM THE DATE THE TAXES WERE ASSESSED (NOT 10 YEARS FROM DATE LIEN WAS FIELD).
  • LIQUDATE THE ASSETS AND PAY THE FUNDS TO THE IRS
  • FILE A CHAPTER 13 AND PAY THE VALUE OF THE ASSET.
  • IN A CHAPTER 13, THE DEBTOR CAN STRIP DOWN THE LIEN TO THE VALUE OF THE ASSET.

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