diff --git a/peer/brontide.go b/peer/brontide.go
index c50f4eba..12780ee4 100644
--- a/peer/brontide.go
+++ b/peer/brontide.go
@@ -2496,6 +2496,13 @@ type linkFailureReport struct {
 // force closing the channel depending on severity, and sending the error
 // message back to the remote party.
 func (p *Brontide) handleLinkFailure(failure linkFailureReport) {
+	// Retrieve the channel from the map of active channels. We do this to
+	// have access to it even after WipeChannel remove it from the map.
+	chanID := lnwire.NewChanIDFromOutPoint(&failure.chanPoint)
+	p.activeChanMtx.Lock()
+	lnChan := p.activeChannels[chanID]
+	p.activeChanMtx.Unlock()
+
 	// We begin by wiping the link, which will remove it from the switch,
 	// such that it won't be attempted used for any more updates.
 	//
@@ -2524,6 +2531,17 @@ func (p *Brontide) handleLinkFailure(failure linkFailureReport) {
 		}
 	}
 
+	// If this is a permanent failure, we will mark the channel borked.
+	if failure.linkErr.PermanentFailure && lnChan != nil {
+		peerLog.Warnf("Marking link(%v) borked due to permanent "+
+			"failure", failure.shortChanID)
+
+		if err := lnChan.State().MarkBorked(); err != nil {
+			peerLog.Errorf("Unable to mark channel %v borked: %v",
+				failure.shortChanID, err)
+		}
+	}
+
 	// Send an error to the peer, why we failed the channel.
 	if failure.linkErr.ShouldSendToPeer() {
 		// If SendData is set, send it to the peer. If not, we'll use