What To Know About Tax Liens in Ohio
Sometimes when people pay taxes to the federal or state government, they can’t afford to pay the full amount they owe. When taxpayers get behind on their taxes, they may end up with a tax lien. A lien from the federal Internal Revenue Service (IRS) or a state tax agency can seriously hamper your finances for years afterward. What’s worse, liens are a type of debt that can be extremely difficult to discharge through the bankruptcy process.
If you’ve had a lien filed against you for unpaid taxes, talk to the Ohio bankruptcy lawyers at Amourgis & Associates, Attorneys at Law right away. While getting a tax lien discharged through bankruptcy can be a challenge, we’ll work with you to find the best way forward and put you back on the path toward financial recovery.
Our seasoned bankruptcy lawyers are highly regarded throughout Ohio and have received extensive recognition for our legal services, including an A+ rating from the Better Business Bureau. Get a free initial consultation with one of our highly experienced lawyers by calling one of our offices throughout Ohio, or you can fill out our contact form.
What Is a State Tax Lien?
A state tax lien is basically a claim made against your property by a tax-collecting agency when you fail to pay the taxes you owe. If you fail to repay the debt, the entity with the lien can sell the property that is subject to the lien.
Tax liens can be placed against individuals or businesses that do not pay taxes that they owe.
Many Ohio tax liens are imposed by the IRS for unpaid federal taxes. However, not all tax liens are made by the IRS. If you pay your federal taxes but fail to pay your necessary state taxes, the state of Ohio can file a lien against you. We strongly recommend speaking to a lawyer as soon as possible if you’ve had a lien filed against you, no matter whether the lien has been filed by the federal government or a state agency. We can go over your options to get your tax debt discharged.
What Is the Impact of a Tax Lien?
A state tax lien can have a substantial impact on many different areas of your life. First and foremost, a tax lien is yet another debt you have to pay off, which can be quite onerous if you already have substantial debts. And unlike some other creditors, it’s quite difficult to renegotiate a lien compared to other kinds of debts. This means you could have a lien weighing on you for quite some time.
Having an active tax lien against you can affect you in other ways as well. For instance, if you try to sell your home and you have a tax lien filed against it, the taxing agency is entitled to a portion of the proceeds from the sale.
Tax liens can show up on your credit report. Having an active tax lien on your credit report can severely hamper your ability to obtain credit, which can make it next to impossible to buy a house, get a loan for a car, or obtain a credit card.
Paying Off Tax Liens Through Bankruptcy
Tax liens are a bit of a gray area in bankruptcy law. While most types of debt are either dischargeable (meaning they can be wiped out through bankruptcy) or non-dischargeable regardless of the circumstances, tax liens are dischargeable in some situations but not others.
If you file for Chapter 7 bankruptcy, your tax liens may be able to be discharged if you meet all of the following qualifications:
- The lien is related to taxes owed from at least three years ago.
- You initially filed a tax return on time.
- You filed the tax return at least two years before filing for bankruptcy.
- The IRS or other taxing agency must have assessed your tax debt at least 240 days before you filed for bankruptcy.
- Your tax return was truthful.
- You did not commit tax evasion.
If you do not meet these qualifications, you will most likely not be able to have a tax lien discharged through Chapter 7 bankruptcy.
Chapter 13 bankruptcy cases work slightly differently. In a Chapter 13 filing, you get to keep more of your assets in exchange for working out a repayment plan with your various creditors, including any government that’s filed a tax lien against you. You can usually work your tax lien into whatever payment plan you work out with your creditors. However, if you miss a payment, you could end up back at square one and having to pay retroactive interest or additional penalties. For this reason, be sure to get help from an experienced bankruptcy attorney before entering into any repayment agreement with your creditors.
Contact a Bankruptcy Attorney in Ohio
Going through bankruptcy can help you find your financial footing again. Because most people are unfamiliar with the bankruptcy process and all of its requirements, it’s important to get help from an experienced and knowledgeable Ohio bankruptcy lawyer.
The bankruptcy attorneys at Amourgis & Associates, Attorneys at Law can review your situation and help you find the quickest way back to financial solvency. No matter how bad things may seem, we have the knowledge and experience to help you. Learn more about our services by calling one of our six offices throughout Ohio or by visiting our contact page.
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At Amourgis & Associates, Attorneys at Law, we only represent consumers. We fight for regular people who have been seriously hurt in accidents. We fight for people who are being crushed by overwhelming debt and need a fresh start. We fight for individuals and families. Never businesses. Never insurance companies. We are loyal to the consumer.
