What toDo If the IRSHas Filed a LienAgainst You Before filing for Chapter 7 bankruptcy, it’s important to know whether the IRS has filed any liens against you. Liens can be filed to protect the government’s interests, so even if you’ve filed for bankruptcy and some of your taxes are dischargeable, you may still be responsible for them.
MEMES Don't forget to listen to the IRS Radio Hour every SUNDAY AT 5:00 P.M. ON AM 560 THE ANSWER If a person owes the IRS but continues to put money into a 401(k), this can be considered flagrant conduct. My client had $25,000 in his 401(k), which the IRS was planning to take to help pay off his debts. However, this gentleman was automatically enrolled in his employer’s 401(k) program immediately upon hire, Recently, I worked with a client who owed $40,000 in taxes from seven years prior, and because the IRS had filed a lien against him, he still owed those debts. The IRS couldn’t freeze his bank account or garnish his wages under the bankruptcy laws, but they could go after his 401(k). It’s important to note that the IRS has to go through certain procedures before they can levy your money, even if it’s in a 401(k). They have to determine if there is money or value from another source they can take first. Then they have to determine if there has been any flagrant conduct on your behalf that would force you to forfeit your 401(k). The IRS also has to determine if you need the money you have to live on currently or in the near future.
which means he didn’t really have choice as to where that money was going in the first place. Because of this, the IRS had no right to touch my client’s 401(k), and his retirement savings stayed intact. If you can analyze whether or not the IRS has filed a lien on you before you file for bankruptcy, you can be better prepared to defend your money. If you are considering filing for Chapter 7 bankruptcy, call the Law Offices of Steven A. Leahy at 312-664-6649 so we can help defend your earnings.
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