Tax liens apply to all equity in property without regard to exemptions. They cover all real and personal property in the locality where they are filed. These liens include clothing and even your tooth brush.

If the debtor states that his property has a certain value, that value will determine the amount of the lien. These liens cannot be split between real and personal property, because they apply to all property as a unit. Until they are paid, they are attached.

However, they can be crammed down to the value of the property. How much you state your property is worth really matters here.

If you say that your clothes are worth $2,000 and your furniture is worth $8,000 and the equity in your house is $50,000 ($285,000 value minus mortgages of $235,000), then the tax lien of $100,000 is secured by at least $60,000. The remaining $40,000 would be unsecured.

If your property is really worth less, the lien is still worth $60,000, BECAUSE YOU SAID IT WAS. If the IRS believes that your property is worth more, then it can object to your valuations and request a hearing to prove it.

Determining the actual value of your property, preferably using the liquidation value, is important in determining how much money you have to pay on tax liens.