Our government is very serious when it comes to paying taxes, as they should. When you do not pay federal, state, or property taxes, the government can place a tax lien on your home. A tax lien is a legal claim on your property for failure to pay taxes. It gives the lienholder first rights to your property over other creditors. A lien is a serious matter. It can negatively affect your credit. Unpaid tax liens can remain on credit reports indefinitely, whereas paid tax liens can remain for up to seven years from the date filed. A Few Suggestions
1. Pay your tax bill in full - Parting with your hard-earned money is not easy, however paying your tax bill in full is one of the fastest ways to appease the government and move on with your life. Typically, the government releases tax liens within 30 days of full payment of an outstanding debt (including penalties and interest). The release will remove the lien from the property.
2. Set up an installment plan - If you cannot pay the amount you owe in full, set up an installment plan with the government. This lets you pay off your tax debt over time. The tax authority releases the lien once you have set up a payment plan.
3. Dispute a filing error - Mistakes appear on credit reports all the time. The Consumer Finance Protection Bureau reports an estimated 76% of credit-reporting complaints they have received since 2011 are related to errors — including state or federal tax liens that mistakenly appeared on credit reports.
4. Sell the property - If you do not have the funds to pay an outstanding tax debt in full, and you cannot afford an installment plan, another option is selling the property and satisfying the debt with proceeds from the sale. However, this method only works if the sale price is high enough to pay off the lien and any existing mortgages on the property. If the sale does not generate enough proceeds to pay off attached liens, there are other options.
Contact Tina and Jimmy for all your real estate needs. Utilizing our local, full service, modified commission program, your home will sell in a timely manner with the best financial results.
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