diff --git a/lntest/itest/lnd_multi-hop_htlc_aggregation_test.go b/lntest/itest/lnd_multi-hop_htlc_aggregation_test.go
new file mode 100644
index 00000000..fa6a46b5
--- /dev/null
+++ b/lntest/itest/lnd_multi-hop_htlc_aggregation_test.go
@@ -0,0 +1,427 @@
+package itest
+
+import (
+	"context"
+	"fmt"
+	"time"
+
+	"github.com/btcsuite/btcd/chaincfg/chainhash"
+	"github.com/btcsuite/btcd/wire"
+	"github.com/lightningnetwork/lnd"
+	"github.com/lightningnetwork/lnd/lncfg"
+	"github.com/lightningnetwork/lnd/lnrpc"
+	"github.com/lightningnetwork/lnd/lnrpc/invoicesrpc"
+	"github.com/lightningnetwork/lnd/lnrpc/routerrpc"
+	"github.com/lightningnetwork/lnd/lntest"
+	"github.com/lightningnetwork/lnd/lntest/wait"
+	"github.com/lightningnetwork/lnd/lntypes"
+	"github.com/stretchr/testify/require"
+)
+
+// testMultiHopHtlcAggregation tests that in a multi-hop HTLC scenario, if we
+// force close a channel with both incoming and outgoing HTLCs, we can properly
+// resolve them using the second level timeout and success transactions. In
+// case of anchor channels, the second-level spends can also be aggregated and
+// properly feebumped, so we'll check that as well.
+func testMultiHopHtlcAggregation(net *lntest.NetworkHarness, t *harnessTest,
+	alice, bob *lntest.HarnessNode, c commitType) {
+
+	const finalCltvDelta = 40
+	ctxb := context.Background()
+
+	// First, we'll create a three hop network: Alice -> Bob -> Carol.
+	aliceChanPoint, bobChanPoint, carol := createThreeHopNetwork(
+		t, net, alice, bob, false, c,
+	)
+	defer shutdownAndAssert(net, t, carol)
+
+	// To ensure we have capacity in both directions of the route, we'll
+	// make  a fairly large payment Alice->Carol and settle it.
+	const reBalanceAmt = 500_000
+	invoice := &lnrpc.Invoice{
+		Value: reBalanceAmt,
+	}
+	ctxt, _ := context.WithTimeout(ctxb, defaultTimeout)
+	resp, err := carol.AddInvoice(ctxt, invoice)
+	require.NoError(t.t, err)
+
+	sendReq := &routerrpc.SendPaymentRequest{
+		PaymentRequest: resp.PaymentRequest,
+		TimeoutSeconds: 60,
+		FeeLimitMsat:   noFeeLimitMsat,
+	}
+	ctxt, _ = context.WithTimeout(ctxb, defaultTimeout)
+	stream, err := alice.RouterClient.SendPaymentV2(ctxt, sendReq)
+	require.NoError(t.t, err)
+
+	result, err := getPaymentResult(stream)
+	require.NoError(t.t, err)
+	require.Equal(t.t, result.Status, lnrpc.Payment_SUCCEEDED)
+
+	// With the network active, we'll now add a new hodl invoices at both
+	// Alice's and Carol's end. Make sure the cltv expiry delta is large
+	// enough, otherwise Bob won't send out the outgoing htlc.
+	const numInvoices = 5
+	const invoiceAmt = 50_000
+
+	var (
+		carolInvoices  []*invoicesrpc.AddHoldInvoiceResp
+		aliceInvoices  []*invoicesrpc.AddHoldInvoiceResp
+		alicePreimages []lntypes.Preimage
+		payHashes      [][]byte
+		alicePayHashes [][]byte
+		carolPayHashes [][]byte
+	)
+
+	// Add Carol invoices.
+	for i := 0; i < numInvoices; i++ {
+		preimage := lntypes.Preimage{1, 1, 1, byte(i)}
+		payHash := preimage.Hash()
+		invoiceReq := &invoicesrpc.AddHoldInvoiceRequest{
+			Value:      invoiceAmt,
+			CltvExpiry: finalCltvDelta,
+			Hash:       payHash[:],
+		}
+		ctxt, cancel := context.WithTimeout(ctxb, defaultTimeout)
+		defer cancel()
+		carolInvoice, err := carol.AddHoldInvoice(ctxt, invoiceReq)
+		require.NoError(t.t, err)
+
+		carolInvoices = append(carolInvoices, carolInvoice)
+		payHashes = append(payHashes, payHash[:])
+		carolPayHashes = append(carolPayHashes, payHash[:])
+	}
+
+	// We'll give Alice's invoices a longer CLTV expiry, to ensure the
+	// channel Bob<->Carol will be closed first.
+	for i := 0; i < numInvoices; i++ {
+		preimage := lntypes.Preimage{2, 2, 2, byte(i)}
+		payHash := preimage.Hash()
+		invoiceReq := &invoicesrpc.AddHoldInvoiceRequest{
+			Value:      invoiceAmt,
+			CltvExpiry: 2 * finalCltvDelta,
+			Hash:       payHash[:],
+		}
+		ctxt, cancel := context.WithTimeout(ctxb, defaultTimeout)
+		defer cancel()
+		aliceInvoice, err := alice.AddHoldInvoice(ctxt, invoiceReq)
+		require.NoError(t.t, err)
+
+		aliceInvoices = append(aliceInvoices, aliceInvoice)
+		alicePreimages = append(alicePreimages, preimage)
+		payHashes = append(payHashes, payHash[:])
+		alicePayHashes = append(alicePayHashes, payHash[:])
+	}
+
+	// Now that we've created the invoices, we'll pay them all from
+	// Alice<->Carol, going through Bob. We won't wait for the response
+	// however, as neither will immediately settle the payment.
+	ctx, cancel := context.WithCancel(ctxb)
+	defer cancel()
+
+	// Alice will pay all of Carol's invoices.
+	for _, carolInvoice := range carolInvoices {
+		_, err = alice.RouterClient.SendPaymentV2(
+			ctx, &routerrpc.SendPaymentRequest{
+				PaymentRequest: carolInvoice.PaymentRequest,
+				TimeoutSeconds: 60,
+				FeeLimitMsat:   noFeeLimitMsat,
+			},
+		)
+		require.NoError(t.t, err)
+	}
+
+	// And Carol will pay Alice's.
+	for _, aliceInvoice := range aliceInvoices {
+		_, err = carol.RouterClient.SendPaymentV2(
+			ctx, &routerrpc.SendPaymentRequest{
+				PaymentRequest: aliceInvoice.PaymentRequest,
+				TimeoutSeconds: 60,
+				FeeLimitMsat:   noFeeLimitMsat,
+			},
+		)
+		require.NoError(t.t, err)
+	}
+
+	// At this point, all 3 nodes should now the HTLCs active on their
+	// channels.
+	nodes := []*lntest.HarnessNode{alice, bob, carol}
+	err = wait.NoError(func() error {
+		return assertActiveHtlcs(nodes, payHashes...)
+	}, defaultTimeout)
+	require.NoError(t.t, err)
+
+	// Wait for Alice and Carol to mark the invoices as accepted. There is
+	// a small gap to bridge between adding the htlc to the channel and
+	// executing the exit hop logic.
+	for _, payHash := range carolPayHashes {
+		h := lntypes.Hash{}
+		copy(h[:], payHash)
+		waitForInvoiceAccepted(t, carol, h)
+	}
+
+	for _, payHash := range alicePayHashes {
+		h := lntypes.Hash{}
+		copy(h[:], payHash)
+		waitForInvoiceAccepted(t, alice, h)
+	}
+
+	// Increase the fee estimate so that the following force close tx will
+	// be cpfp'ed.
+	net.SetFeeEstimate(30000)
+
+	// We'll now mine enough blocks to trigger Bob's broadcast of his
+	// commitment transaction due to the fact that the Carol's HTLCs are
+	// about to timeout. With the default outgoing broadcast delta of zero,
+	// this will be the same height as the htlc expiry height.
+	numBlocks := padCLTV(
+		uint32(finalCltvDelta - lncfg.DefaultOutgoingBroadcastDelta),
+	)
+	_, err = net.Miner.Node.Generate(numBlocks)
+	require.NoError(t.t, err)
+
+	// Bob's force close transaction should now be found in the mempool. If
+	// there are anchors, we also expect Bob's anchor sweep.
+	expectedTxes := 1
+	if c == commitTypeAnchors {
+		expectedTxes = 2
+	}
+
+	bobFundingTxid, err := lnd.GetChanPointFundingTxid(bobChanPoint)
+	require.NoError(t.t, err)
+	_, err = waitForNTxsInMempool(
+		net.Miner.Node, expectedTxes, minerMempoolTimeout,
+	)
+	require.NoError(t.t, err)
+	closeTx := getSpendingTxInMempool(
+		t, net.Miner.Node, minerMempoolTimeout, wire.OutPoint{
+			Hash:  *bobFundingTxid,
+			Index: bobChanPoint.OutputIndex,
+		},
+	)
+	closeTxid := closeTx.TxHash()
+
+	// Go through the closing transaction outputs, and make an index for the HTLC outputs.
+	successOuts := make(map[wire.OutPoint]struct{})
+	timeoutOuts := make(map[wire.OutPoint]struct{})
+	for i, txOut := range closeTx.TxOut {
+		op := wire.OutPoint{
+			Hash:  closeTxid,
+			Index: uint32(i),
+		}
+
+		switch txOut.Value {
+		// If this HTLC goes towards Carol, Bob will claim it with a
+		// timeout Tx. In this case the value will be the invoice
+		// amount.
+		case invoiceAmt:
+			timeoutOuts[op] = struct{}{}
+
+		// If the HTLC has direction towards Alice, Bob will
+		// claim it with the success TX when he learns the preimage. In
+		// this case one extra sat will be on the output, because of
+		// the routing fee.
+		case invoiceAmt + 1:
+			successOuts[op] = struct{}{}
+		}
+	}
+
+	// Mine a block to confirm the closing transaction.
+	mineBlocks(t, net, 1, expectedTxes)
+
+	time.Sleep(1 * time.Second)
+
+	// Let Alice settle her invoices. When Bob now gets the preimages, he
+	// has no other option than to broadcast his second-level transactions
+	// to claim the money.
+	for _, preimage := range alicePreimages {
+		ctx, cancel = context.WithTimeout(ctxb, defaultTimeout)
+		defer cancel()
+		_, err = alice.SettleInvoice(ctx, &invoicesrpc.SettleInvoiceMsg{
+			Preimage: preimage[:],
+		})
+		require.NoError(t.t, err)
+	}
+
+	// With the closing transaction confirmed, we should expect Bob's HTLC
+	// timeout transactions to be broadcast due to the expiry being reached.
+	// We will also expect the success transactions, since he learnt the
+	// preimages from Alice. We also expect Carol to sweep her commitment
+	// output.
+	expectedTxes = 2*numInvoices + 1
+
+	// In case of anchors, all success transactions will be aggregated into
+	// one, the same is the case for the timeout transactions. In this case
+	// Carol will also sweep her anchor output in a separate tx (since it
+	// will be low fee).
+	if c == commitTypeAnchors {
+		expectedTxes = 4
+	}
+
+	txes, err := getNTxsFromMempool(
+		net.Miner.Node, expectedTxes, minerMempoolTimeout,
+	)
+	require.NoError(t.t, err)
+
+	// Since Bob can aggregate the transactions, we expect a single
+	// transaction, that have multiple spends from the commitment.
+	var (
+		timeoutTxs []*chainhash.Hash
+		successTxs []*chainhash.Hash
+	)
+	for _, tx := range txes {
+		txid := tx.TxHash()
+
+		for i := range tx.TxIn {
+			prevOp := tx.TxIn[i].PreviousOutPoint
+			if _, ok := successOuts[prevOp]; ok {
+				successTxs = append(successTxs, &txid)
+				break
+			}
+
+			if _, ok := timeoutOuts[prevOp]; ok {
+				timeoutTxs = append(timeoutTxs, &txid)
+				break
+			}
+		}
+
+	}
+
+	// In case of anchor we expect all the timeout and success second
+	// levels to be aggregated into one tx. For earlier channel types, they
+	// will be separate transactions.
+	if c == commitTypeAnchors {
+		require.Len(t.t, timeoutTxs, 1)
+		require.Len(t.t, successTxs, 1)
+	} else {
+		require.Len(t.t, timeoutTxs, numInvoices)
+		require.Len(t.t, successTxs, numInvoices)
+
+	}
+
+	// All mempool transactions should be spending from the commitment
+	// transaction.
+	assertAllTxesSpendFrom(t, txes, closeTxid)
+
+	// Mine a block to confirm the transactions.
+	block := mineBlocks(t, net, 1, expectedTxes)[0]
+	require.Len(t.t, block.Transactions, expectedTxes+1)
+
+	// At this point, Bob should have broadcast his second layer success
+	// transaction, and should have sent it to the nursery for incubation,
+	// or to the sweeper for sweeping.
+	ctxt, _ = context.WithTimeout(ctxb, defaultTimeout)
+	err = waitForNumChannelPendingForceClose(
+		ctxt, bob, 1, func(c *lnrpcForceCloseChannel) error {
+			if c.Channel.LocalBalance != 0 {
+				return nil
+			}
+
+			if len(c.PendingHtlcs) != 1 {
+				return fmt.Errorf("bob should have pending " +
+					"htlc but doesn't")
+			}
+
+			if c.PendingHtlcs[0].Stage != 1 {
+				return fmt.Errorf("bob's htlc should have "+
+					"advanced to the first stage but was "+
+					"stage: %v", c.PendingHtlcs[0].Stage)
+			}
+
+			return nil
+		},
+	)
+	require.NoError(t.t, err)
+
+	// If we then mine additional blocks, Bob can sweep his commitment
+	// output.
+	_, err = net.Miner.Node.Generate(defaultCSV - 2)
+	require.NoError(t.t, err)
+
+	// Find the commitment sweep.
+	bobCommitSweepHash, err := waitForTxInMempool(net.Miner.Node, minerMempoolTimeout)
+	require.NoError(t.t, err)
+	bobCommitSweep, err := net.Miner.Node.GetRawTransaction(bobCommitSweepHash)
+	require.NoError(t.t, err)
+
+	require.Equal(
+		t.t, closeTxid, bobCommitSweep.MsgTx().TxIn[0].PreviousOutPoint.Hash,
+	)
+
+	// Also ensure it is not spending from any of the HTLC output.
+	for _, txin := range bobCommitSweep.MsgTx().TxIn {
+		for _, timeoutTx := range timeoutTxs {
+			if *timeoutTx == txin.PreviousOutPoint.Hash {
+				t.Fatalf("found unexpected spend of timeout tx")
+			}
+		}
+
+		for _, successTx := range successTxs {
+			if *successTx == txin.PreviousOutPoint.Hash {
+				t.Fatalf("found unexpected spend of success tx")
+			}
+		}
+	}
+
+	switch {
+
+	// Mining one additional block, Bob's second level tx is mature, and he
+	// can sweep the output.
+	case c == commitTypeAnchors:
+		_ = mineBlocks(t, net, 1, 1)
+
+	// In case this is a non-anchor channel type, we must mine 2 blocks, as
+	// the nursery waits an extra block before sweeping.
+	default:
+		_ = mineBlocks(t, net, 2, 1)
+	}
+
+	bobSweep, err := waitForTxInMempool(net.Miner.Node, minerMempoolTimeout)
+	require.NoError(t.t, err)
+
+	// Make sure it spends from the second level tx.
+	secondLevelSweep, err := net.Miner.Node.GetRawTransaction(bobSweep)
+	require.NoError(t.t, err)
+
+	// It should be sweeping all the second-level outputs.
+	var secondLvlSpends int
+	for _, txin := range secondLevelSweep.MsgTx().TxIn {
+		for _, timeoutTx := range timeoutTxs {
+			if *timeoutTx == txin.PreviousOutPoint.Hash {
+				secondLvlSpends++
+			}
+		}
+
+		for _, successTx := range successTxs {
+			if *successTx == txin.PreviousOutPoint.Hash {
+				secondLvlSpends++
+			}
+		}
+	}
+
+	require.Equal(t.t, 2*numInvoices, secondLvlSpends)
+
+	// When we mine one additional block, that will confirm Bob's second
+	// level sweep.  Now Bob should have no pending channels anymore, as
+	// this just resolved it by the confirmation of the sweep transaction.
+	block = mineBlocks(t, net, 1, 1)[0]
+	assertTxInBlock(t, block, bobSweep)
+
+	ctxt, _ = context.WithTimeout(ctxb, defaultTimeout)
+	err = waitForNumChannelPendingForceClose(ctxt, bob, 0, nil)
+	require.NoError(t.t, err)
+
+	// THe channel with Alice is still open.
+	assertNodeNumChannels(t, bob, 1)
+
+	// Carol should have no channels left (open nor pending).
+	err = waitForNumChannelPendingForceClose(ctxt, carol, 0, nil)
+	require.NoError(t.t, err)
+	assertNodeNumChannels(t, carol, 0)
+
+	// Coop close channel, expect no anchors.
+	ctxt, _ = context.WithTimeout(ctxb, channelCloseTimeout)
+	closeChannelAndAssertType(
+		ctxt, t, net, alice, aliceChanPoint, false, false,
+	)
+}
diff --git a/lntest/itest/lnd_multi-hop_test.go b/lntest/itest/lnd_multi-hop_test.go
index a7086310..9a4819db 100644
--- a/lntest/itest/lnd_multi-hop_test.go
+++ b/lntest/itest/lnd_multi-hop_test.go
@@ -61,6 +61,11 @@ func testMultiHopHtlcClaims(net *lntest.NetworkHarness, t *harnessTest) {
 			name: "remote chain claim",
 			test: testMultiHopHtlcRemoteChainClaim,
 		},
+		{
+			// bob: outgoing and incoming, sweep all on chain
+			name: "local htlc aggregation",
+			test: testMultiHopHtlcAggregation,
+		},
 	}
 
 	commitTypes := []commitType{