What Does Tax Lien On Property Mean
When a person has bad credit problems, one of the debts they might be carrying around is the Tax Lien which needs to be removed of credit report. These are financial spots on your credit report, and it is worth to invest five minutes to learn what is tax lien debts and how they can badly influence your credit and real estate deal.
Getting tax lien removed from credit report needs to be your top priority, as this lowers you credit score and can make it impossible for you to get any mortgage or loan. You can find credit repair companies they Will be happy to help you through (for a nice juicy fee) or you can do it yourself with a cheap credit repair program, that does the same for a fraction of the cost.
How Tax Liens Are Created
Before clearing what is tax lien, it is worth to review how those tax liens appeared on your credit report in the beginning. There can be several possibilities for tax lien, mostly common is when those are submitted by the Federal Government agencies (IRS, USDA…) and offices or by the local state municipalities, in rare occasions liens are even filed by private companies or individuals.
In most cases, and no matter which agency filed the tax lien, the tax lien is placed on a real estate property (home, house, business, raw land, or even cars) the tax lien is files in cases when the federal agency tried to collect the due taxed and failed.
Even a water bill which is not paid over a large period of time and penalties are added and are not paid too, the state or province may file a tax lien file and the person held liable for these payments is notified.
Tax Lien And Your Credit Report
If you have gathered some tax lien over the years, here are a few facts that have a direct impact on your credit report. If you hold any unpaid tax liens, they will stay on your credit report for up to 15 years from the day they where filed! But that is not all, even if you do pay all the Tax liens,their presence will stay on your credit reports for 7 years from they date they’re paid !
If you have several tax lien placed on your property by several federal agencies the tax lien that was perfected first takes priority over all others.
What Are Tax Liens Impacts On Property
The most significant impact having a tax lien on your credit report is that as a seller you can not sell the property unless the tax lien is cleared and fully paid with all the added penalties.
For the home buyer it means that unlike personal debts, in case you are the buyer and the property has tax lien filed upon it, you are now responsible for repayment of all the taxes owed (and added penalties).
What Is ‘Run With The Land’
This is why these kind of tax lien are referred to “run with the land”… The tax lien is connected to the land/real estate (‘run with the land’) and not to the seller… So if you are the new owner, you are totally and legally responsible for their complete closure. The fact that those events happened before you became the owner are sad, but have no legal base to defend you in most local state and county laws.
How To Avoid ‘Buying’ Tax Lien Property
The best advice to you as a buyer is to do your homework! Do not buy a property without to run a full scan title search. Once the title search is completed, you will have enough time in advance to learn on any ‘surprises up the sleeve’ the seller might not fully disclosed.
You should know that there might be a chance that the person selling you the property might not even know that he himself bought it with tax lien attached to it..
These title search alerts will show you the exact amount due and the name of the lien holder (it might not be the person who is the seller). Doing the title search can help you either reconsider the deal , or even use it as a negotiation leverage request to reduce the property’s price.
Tax Lien And Foreclosure
If you bought a property and overlooked the tax lien that are attached to it (which are your debts now) please know that the agency or agencies that you owe them can ask for foreclose on the property.
There is a ten year time frame to settle the tax lien and pay back all the funds that are owed. After this ten year grace period, the property can be sold in a foreclosure sale. What ever sum of money the new buyers pays, you as the seller are only second to receive the payments. The federal agencies, local and county (by the order they filed their tax lien on a first come base..) will receive the total amount due to them.
Fixing bad Credit
What ever you do, you need to fix your credit report and erase tax lien from credit report which may still be on it. Getting you credit fixed is not as complicated as it seem when you have the right guidance. Many people use a home credit repair home education to fix their credit score and rise the credit score by 70-150 points.
So What Is Your Next Step?
Every week you are wasting money.. sending dozens of dollars to the rich credit companies, who relay on you to keep doing NOTHING.
If your score is below 700, you might want to do something about it – get this ‘Credit Repair University’ which will save you money and time.
Yes, you might need to invest a small sum to get a grip of things.. But if you think education is expensive.. try ignorance..
You are probably paying thousands of dollars per year in fees and interests to credit companies which could be going straight to your pocket.
So do your math… and take action NOW.