The government can be relentless when it comes to collecting taxes owed by the residents it presides over. Anyone that has ever been caught in that loop can tell you that the government stops at nothing to collect their money. They have been known to place liens on personal property, levy a consumer’s bank accounts, and have gone so far as to incarcerate individuals for the non-payment of their taxes.
Unfortunately, many consumers find themselves faced with the challenges of dealing with the government. With no relief in sight, they begin to panic and stick their heads in the sand, hoping that the problem will magically go away, only to find the problem worsens the longer they choose to ignore the situation. In some cases, consumers turn to companies that provide tax lien relief help to eliminate and avoid drastic collection activities. These companies are able to settle tax debts that are owed to the government and, in some cases, have tax liens completely removed.
What are tax liens?
When the government issues a tax lien against an individual, or their personal property, they file a legal claim against the assets of an individual or business by putting the individual and the general public on notice that there is a public debt filed against them. These liens are filed at the courthouse and attached to any personal and real property in their name. A lien guarantees that the government will receive a guaranteed payment of the debt, if the financial obligation is not satisfied. In regards to real estate, if the government puts a lien on an individual’s home, they use the home as collateral to guarantee they will receive their money when a homeowner decides to sell or refinance that property. Tax liens may be imposed on real property for failure to pay property taxes, or even income taxes. Regardless, whichever taxing authority issues the lien will have the right to seize the asset if the obligation is not satisfied.
How do tax liens work?
For a federal tax lien pertaining to the failure to pay income taxes, the government can issue a legal claim against an individual’s personal property or levy any bank accounts. The IRS will, of course, send notifications prior to filing any liens or levying the accounts. They will send a letter demanding payment and follow up with additional collection activity. For tax liens against personal property, such as real estate, liens are issued when you’re not paying property taxes for that property. When a property tax lien is registered, the county government allows the homeowner to pay the balance prior to a tax lien sale. If the property taxes are not paid prior to the date of the sale, the county can sell the lien to an individual, usually an investor, in an attempt to collect their money. That individual is required by law to give homeowners a 12 month period of time to pay the tax lien after it has been sold. This period of time is known as the right of redemption. If the homeowner doesn’t pay the property taxes during that 12-month timeframe, the individual that purchased the tax lien has the right to foreclose on the lien and will own the property outright.
How to get tax lien relief?
When a tax lien is filed against an individual, it can have a detrimental residual effect on a person’s credit, and in turn, their ability to sell or refinance their home. In the long run, it will cost an individual a lot more than they initially had due. If the income taxes are not paid in a reasonable amount of time, the government will issue fees and penalties on top of the existing tax debt. The interest and fees alone could run in the tens of thousands of dollars. The inconvenience of having an individual’s bank account levied is another hassle faced by those slipping towards a tax lien. There are ways to get tax lien relief and get rid of the tax debt altogether. The first option is to pay the tax. Simple as that. Of course, in most cases, this isn’t exactly an option, considering that if consumers had the ability to pay the tax lien, they would have already paid it.
Since paying the sum of the taxes owed in full may not be a viable solution, there are options to consider when seeking to get tax lien relief. One way is to set up a payment plan with the government. Another option is to offer a compromise through which an individual agrees to pay back less than what was owed. They’re also able to file an appeal or even file for bankruptcy. Some of these methods are not the most favorable, but are effective tax lien relief options.
Using Tax Lien Relief to Protect an Individual’s Home
Aside from paying the debt in full, individuals are able to apply for lien withdrawal. This removes the public Notice of Federal Tax Lien and insurers other creditors that the government does not have a financial interest in a consumer’s real property. Another way to get rid of tax liens is by selling the home. If there is enough equity in the property, not only is an individual able to sell the property, they may even get some money back from the sale.
If an individual is faced with the challenges of a tax lien, not only does this affect the standing of their real estate property, it can also affect their credit. If an individual’s credit is affected, it makes it much more difficult for them to refinance their home. In many cases, homeowners are not ready to sell their homes in an attempt to pay a tax debt. Often, homeowners find themselves in unfavorable situations where they have to do the unthinkable. Companies such as Skydan Equity Partners provide solutions to homeowners that allow them to stay in their home and tap into its equity without having to endure a stringent loan process.
Traditional banks require homeowners to have a good credit standing. This can be challenging when they are faced with the situation of a tax lien. Usually, if a lien is filed, a homeowner’s credit is already negatively impacted. Skydan Equity Partners give homeowners access to their home’s equity by allowing them to pay off their tax debt and any other financial obligations. Our team of professional experts is able to do what the traditional banks and loan companies are not. We are able to set homeowners up on a lease plan for a two year period of time. After the two year period, the homeowner has the ability to purchase the home back from Skydan at an agreed-upon price plus any deferred rent. Individuals also have the option of selling the property and keeping any value over the payoff amount. This is a more favorable option when homeowners are faced with credit challenges. Skydan offers the tax lien relief to help protect an individual’s home and other financial assets.