State Law Exemptions Don’t Halt IRS
By Jill Michaux, Kansas Bankruptcy Attorney on Nov 5, 2007 in Automatic Stay In Bankruptcy, Bankruptcy Practice and Procedure, Benefits of Bankruptcy, Chapter 13 Bankruptcy, General Bankruptcy Information, Tax Issues In Bankruptcy
We have written many posts about exemptions, the list of property you can keep in bankruptcy. It is important to remember that exemptions don’t halt the Internal Revenue Service.
Only a small amount of personal effects is exempt from levy by the IRS outside of bankruptcy and no property will be excluded from a IRS secured claim in bankruptcy if a lien is properly filed.
IRS can seize your home, your car, your retirement plan, for example, even though you could protect that property from other creditors. Chapter 13 bankruptcy is a useful tool to stop IRS collection and to repay taxes through a repayment plan while you keep your property.
The bankruptcy automatic stay is so powerful it halts the IRS!
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