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Can personal bankruptcy help avoid IRS tax liens?

Homeowners in Arkansas who are experiencing difficult financial times may be concerned about their inability to meet their financial obligations. In addition to credit card debts, they may struggle to pay medical debts, mortgages, and unpaid taxes. When consumers feel that their financial situations have become unmanageable, it may be a suitable time to consider personal bankruptcy. Taking charge of the situation in a timely manner may work to prevent federal tax liens placed against their properties.

An IRS lien can be placed on a taxpayer's property when the property owner has unpaid taxes. The consent of the property owner is not necessary, and the lien will remain dormant until the IRS decides to start foreclosure proceedings, or until the property owner tries to sell the property. A tax lien is not limited to a home but includes all possessions of the taxpayer -- including cash, clothing and furniture. It can even include property acquired or interests earned after placement of the lien.

There is a difference between a levy and an IRS lien. Property is seized with a levy, but a lien is a form of enforcing the payment of tax amounts that are in arrears. IRS liens remain on properties until all tax arrears have been paid. There is a statute of limitations that may cancel a lien after a certain number of years.

Arkansas taxpayers may benefit from gaining knowledge about tax arrears and personal bankruptcy options. The services of an experienced personal bankruptcy attorney may be beneficial. A lawyer can explain under what circumstances tax debts can be discharged, and how IRS liens can be avoided. 

Source: marketwatch.com, "Chicago Bankruptcy Lawyer Richard Fonfrias Provides Facts on IRS Tax Liens", Richard Fonfrias, June 30, 2015

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