Can Filing For Bankruptcy Protect my Home From an Income Tax Lien?

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If you find yourself in a situation where you owe money in income tax that you cannot pay off, you should strongly consider filing for bankruptcy. Though the term “bankruptcy” has an overwhelming, frightening connotation, the fact is, it may be just what you need to get back on your feet financially again. What’s more, if you owe money in income tax, there is a very good chance we can have it discharged entirely, as long as you are proactive and file soon. Here are some of the questions you may have regarding the bankruptcy process:

How is an income tax lien different from a judgment lien?

Income tax liens, though quite similar to judgment liens, are primarily different in that they cannot be removed once the IRS stamps you with one. An income tax lien, rather simply, means the IRS will forcefully take the money you owe in income tax. Once an income tax lien is issued, there is very little you can do to get out of paying it.

How can filing for bankruptcy stop an income tax lien?

When you file for bankruptcy, all acts to create, perfect, or enforce liens are forbidden by federal law. This is a huge sigh of relief for many across the country, however, it is very important you file for bankruptcy before you are slapped with the lien.

Why should I file for bankruptcy before the IRS places an income tax lien?

Let’s say you owe the IRS $8,000 in income tax over the past two years. In several cases, if you file for bankruptcy, you will not have to pay that money back–ever. That is why it is so crucial you speak with a knowledgeable and trustworthy bankruptcy attorney as soon as you can.

If you have any additional questions regarding the bankruptcy process, or you are ready to file, though you are unsure of whether to file for Chapter 7 or Chapter 13, please do not hesitate to reach out to our firm. We have been helping clients navigate to their safe harbor for years. We understand how intimidating the bankruptcy process can be, however, we can be your light at the end of your tunnel. We are ready to help. All you have to do is ask.

Contact our experienced New York bankruptcy firm

Bankruptcy, for many people, is a frightening endeavor. Fortunately, with the help of a knowledgeable attorney, it does not have to be. If you require the services of an experienced Business Law or Bankruptcy attorney, contact the Law Offices of Allen A. Kolber, Esq. today to schedule a consultation and discuss your options. We will have your back every step of the way.