The Short Answer
You can check for a tax lien in two ways: visit the Clerk of Court's office in the county where you live and ask the civil filing department to search for any liens filed against you, or contact the IRS or NCDOR directly and request a copy of any lien on file. A tax lien is "perfected" once it's filed with the Clerk of Court, and at that point it attaches to your real and personal property — your home, car, and bank accounts. Knowing whether a tax lien exists before you file bankruptcy is critical, because it directly affects which chapter makes sense for your situation and what your monthly payments will look like in a Chapter 13 plan.
Do you owe income taxes to the Internal Revenue Service (IRS) or State of North Carolina (NCDOR)? If so, you may find that you have an income tax lien filed against you. There are two ways to confirm whether a tax lien has been “perfected” or filed with the Clerk of Court in the county you claim as your residence.
First, you can go to the Clerk of Court’s office in the county you live. The Clerk’s office is most likely located inside the county courthouse. Ask to speak to someone in the civil filing department within the Clerk of Court’s office. Explain to the clerk at the desk or window that you need to determine if you have a tax lien filed against you. The Clerk of Court’s staff is usually extremely helpful and will assist you with your research to determine if a tax lien has been filed against you. If you determine there is a lien filed against you, we recommend you obtain a copy of the lien paperwork, since it will specify which tax years are included in the lien. In many cases you may owe taxes for several years’ but only select years are included in the tax lien. It is highly recommended that you bring cash with you to the Clerk of Court’s office, since they may not accept a check, credit card or debit card to pay for copies of the tax lien paperwork.
The other option for determining if you have a tax lien filed against you is to contact the IRS or NCDOR and inquire if they have a tax lien against you. If they do have a lien filed against you, ask that they provide you with a copy of the paperwork. The copy may be provided to you free of charge or there may be a nominal fee, but it may take several days to obtain a copy of the lien through the U.S. Postal Service.
A perfected tax lien, one filed with the Clerk of Court within the county you live, attaches to both your real and personal property. In other words, the tax lien will attach to your home, cars, bank accounts, etc. As a result, it is extremely important to determine if you have a tax lien prior to filing bankruptcy. The amount of taxes you owe to the IRS or NCDOR, and the existence of a tax lien, will impact the type of bankruptcy that is best suited for your needs and it will directly impact your monthly payments in a Chapter 13 bankruptcy. Checking for a tax lien is time well spent, especially if it saves you money in your bankruptcy!
Key Takeaways
- Visit the Clerk of Court's office in your county and ask the civil filing department to search for any tax liens filed in your name.
- You can also contact the IRS or NCDOR directly and request a copy of any lien they have on file, though it may take several days to arrive by mail.
- Bring cash to the Clerk of Court's office, as many offices do not accept checks, credit cards, or debit cards for copies of lien paperwork.
- A perfected tax lien attaches to all of your real and personal property, including your home, vehicles, and bank accounts.
- The tax years covered by a lien matter — you may owe taxes for multiple years but only certain years may be included in the filed lien.
- The existence of a tax lien will affect both the type of bankruptcy that is right for you and the amount of your monthly payments in a Chapter 13 plan.
Attorney Insight
The mistake I see most often is clients coming in who assume their tax debt is just a balance due — they have no idea a lien has already been filed and attached to their home. That changes everything. In Chapter 7, a discharge can wipe out personal liability for certain older income taxes, but it does not eliminate a perfected lien on your property, which means the IRS or NCDOR can still pursue that asset. In Chapter 13, a tax lien secured by real property has to be treated as a secured claim in your plan, which can significantly increase your monthly payment — something we can only account for if we know the lien exists before we file.
