top Ad Widget

Collapse

Announcement

Collapse
No announcement yet.

Ch 7 and Federal Tax Liens

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Ch 7 and Federal Tax Liens

    So my husband is finally filing his petition for CH 7. Because of the Federal Tax Lien he has on his property and basically his life, it got a little complicated but he has a good lawyer and we are just so excited to get a fresh start. I want to know if anyone can give me feedback about how liens affected them and their bankruptcy. The Liens equal about 70k and according to the petition, we have negative 20k equity (his) house but he does have a 401k with about 57k in it. The lawyer says there is a chance the IRS will not release the lien because his 401k is considered an asset and in order to have the lien go away, he may have to pay the whole 70k back to the IRS over a 5 year CH 13 plan. My husband says he would rather give up his 401k and be done with it then deal with a 5 year CH 13. Has anyone been in this situation before? What happened. The lawyer says the IRS very may well just release the lien after the taxes are discharged but still wants us prepared for a worst case scenario.

    #2
    Don't touch the 401k, seriously you will be kicking yourself in the future. Your 401k account is not a savings account, it is your future.

    Comment


      #3
      As stated, I would never, ever, steal my future to attempt to settle things today. Been there, done that. Just follow your attorney's advice and file and then deal with the IRS when it's time. You never know what the IRS position is going to be or whether your 401(k) plan has certain protections (based on the language in the Summary Plan Description).

      Federal Tax Liens (FTLs) are special and I know that I personally avoided getting to the point where the IRS filed such a lien against my property. Most people deal with other types of judicial and consensual liens and "PMSI" and "non-PMSI" liens (purchase money security interest liens). I have not personally needed to deal with an FTL in my bankruptcy.

      Your lawyer is telling you the right thing. File. Receive discharge. Contact Central Insolvency Operations (bankruptcy department) to see what the IRS decides to do. Deal with the IRS' decision at that point!
      Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
      Status: (Auto) Discharged and Closed! 5/10
      Visit My BKForum Blog: justbroke's Blog

      Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

      Comment

      bottom Ad Widget

      Collapse
      Working...
      X