6.4.a.1 Post-Discharge Validity

• Jurisdiction: United States

1. Generally

In Chapter 7 the order of priority of payout for tax claims secured by liens are governed by 11 U.S.C. § 724(b), which prescribes a somewhat complicated formula for priority. See, for example, In re A.G. Van Metre Jr., Inc. 148 B.R. 450 (Bankr. E.D.Va 1992) where the Chapter 7 trustee was permitted to sell property free and clear of liens, and subordinate the tax liens to payment of other secured claims and administrative expenses. See also In re Darnell834 F.2d 1263 (6th Cir. 1987) which...