How are tax liens treated in bankruptcy

There are two types of tax liens:  property tax lien and income tax lien.  Both liens have an impact on your bankruptcy, but the treatment may be different.  The treatment will also depend upon whether you filed a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy.

Chapter 7 Bankruptcy
If you are filing a Chapter 7 bankruptcy, you will be held responsible for any taxes that have been levied against you.  If you are surrendering a house in a Chapter 7 bankruptcy, the taxes will be assessed against you for as long as you are the legal owner of the property.  The property legally belongs to you until it is conveyed to a new owner by purchase, foreclosure, deed in lieu of foreclosure, quit claim deed, etc.  For example, if the house is surrendered in bankruptcy, the taxes will be paid by the mortgage company when the property is foreclosed on.

Chapter 13 Bankruptcy
If you are filing a Chapter 13 bankruptcy, the taxes on real or personal property owed on the date of bankruptcy filing will be included in the Chapter 13 bankruptcy payment.  This would include any taxes due and payable as of the date you file bankruptcy.  For any taxes incurred after the date of bankruptcy filing, you will need to pay those taxes directly to the taxing authority.

Please call me today at (801) 432-8682 to discuss your specific situation and how Bankruptcy may be right for you.

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    Bankruptcy Attorney

    Ryan E. Simpson
    8839 S. Redwood Road, Suite C2
    West Jordan, Utah 84088
    United States

    Telephone: (801) 432-8682

    Ryan E. Simpson

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