If you have decided to file for bankruptcy, you are probably expecting most of your debts to be dealt with through this process. However, some types of debt cannot be erased through bankruptcy, and that can sometimes include certain types of tax liens. If you have any tax liens to contend with, it’s wise to tell your Bergen County Chapter 7 bankruptcy lawyer about them before you file.
What Are Tax Liens?
Tax liens are an interest or claim placed against your property by the IRS or the New Jersey Division of Taxation. If you do not pay your taxes, a lien can be placed on your property. This does not take the property from you, but it can be inconvenient in other ways.
For example, if you wanted to refinance your mortgage, that is not a possibility when a lien has been placed against your property. If you decide to sell your property, the IRS or state tax collector is sure to take what they are owed. So you may not even be able to profit from the sale of your own real estate.
Can Bankruptcy Eliminate All Tax Liens?
If tax liens were in place before you filed for bankruptcy, they are probably going to stay in place. You can pay off the IRS during the process though. In Chapter 7 bankruptcy, assets are liquidated and creditors are paid as much as possible. The IRS can take some of that money. If you do not have enough assets, then the lien is unlikely to be paid off and will remain in place.
How Can I Handle Remaining Debts After Bankruptcy?
Your tax liens may not be the only remaining debt you have after filing for bankruptcy. If you want a completely clean slate, you are going to need to do something about these remaining liabilities.
When it comes to tax liens, you have a few options. You can pay off the tax lien in full and get it released. You can also try to work out a payment plan so that you can get the lien off your record eventually. In some cases, people actually file for Chapter 13 bankruptcy to take care of remaining debts like tax liens. You would work out a payment plan and get all remaining debts removed from your record after that payment plan ends, provided you keep up with payments and do not end up getting into more debt from other sources.
Contact Our Law Firm Today
If you are considering bankruptcy, contact the Law Office of Boyd & Squitieri. We can tell you more about the process and if this could be the right path forward for you. Schedule a consultation and learn more about Chapter 7 and Chapter 13 bankruptcy today.
