Posted On May 06, 2017
You have reached the tipping point with a tax lien

You have reached the tipping point with a tax lien

The Internal Revenue Service does not mess around. They want their money, and if they say you owe them money, they will do what they have to in order to claim that amount. Similarly, local and state tax bureaus often take drastic steps if you have not paid the money you owe.

One method the IRS and other tax agencies use is placing a lien on your property. A lien lets the public know that you have not paid your taxes and that the tax agency has a claim on the property you own to satisfy the amount you owe. In addition, a lien negatively affects your credit score.

How does a lien work?

If you owe property or income taxes, you will receive a letter from the IRS or local tax bureau demanding the payment in full by a certain deadline. At this point, you have two choices: you can make the payment in full, or you can contact the agency and discuss a payment plan. If you fail to do one of these before the deadline, the agency may place the lien on the property.

Other consequences of failing to pay your property taxes may include the following:

  • Your mortgage lender may pay the taxes then demand payment from you on their own terms, including foreclosure.
  • If you can sell the property before foreclosure, you may be able to pay off the lien with any profit from the sale.
  • In some states, the tax agency can take possession of the property to sell it, or they may begin the foreclosure process.

The lien may remain on your property even if you try to sell it. In fact, when buyers learn there is a lien on the property, they typical lose interest in it because it may mean that the new owner assumes responsibility for your debt.

Someone you can truly lean on

Whatever the reason you fell behind on your taxes, there are alternatives for saving your house from foreclosure. An attorney with long-term, local experience helping homeowners avoid foreclosure will know which options will work best for your situation.

For example, your attorney may be able to negotiate with IRS and work out a payment plan or an offer in compromise. If repaying the debt is not possible, you may qualify for other possibilities, such as the innocent spouse rule or even bankruptcy. Having an attorney helping you through this complicated and stressful time means every possible option will be examined and considered to bring about the most positive resolution.