If you have a house or property in San Diego with a tax lien and are wondering what your options are, this article is for you. We are going to take a deep dive into tax liens, different types of tax liens, and what options you have when you have one on your home.
Let’s Define Tax Liens
Let’s first dive into what a tax lien is exactly. According to nerdwallet.com, “A tax lien is a legal claim a government places on real estate or other assets when the owner is past due on taxes. The IRS can place a lien on a person’s current home, car, and bank account, as well as any future property they acquire. Municipalities may sell tax liens to investors who pay the tax bill in return for the right to collect the money and interest from property owners. If you don’t take care of a federal tax lien, a tax levy — an actual seizure of property to pay taxes owed — could come next. Tax levies can include things such as garnishing your wages or seizing assets and bank accounts.” When you have a tax lien on your property in San Diego, it can pose serious challenges when you are wanting to sell your home or need to sell your home.
Voluntary vs. Involuntary Liens
Let’s make sure to get into the differences between a voluntary lien and an involuntary lien. Lending Tree tell us that, “A mortgage is a loan you get from a lender to finance a home purchase. When you take out a mortgage, you promise to repay the money you’ve borrowed at an agreed-upon interest rate.” Your mortgage is one of the most common types of liens you can have! It is important to note that a mortgage is not imposed as a punishment. Of course, if you don’t pay your mortgage, there are serious consequences, but a mortgage doesn’t set out to enforce the payment of this type of debt.
Most liens are involuntary. This is when the government or other entities take hold of your property when the homeowner doesn’t pay certain debts. This can come in the form of taxes or even a contractor that was not paid. The lien gives the lien holder the opportunity to take hold of the property until all debts have been paid off. Sometimes this isn’t quite so easy, especially for homeowners facing financial hardship. Many times, homeowners that have a lien on their home are in that situation in the first place because they simply can’t pay off the debt due to financial constraints.
Liens, Liens, and More Liens
INCOME TAX LIENS
Investopedia tells us that a ,”A federal tax lien is the U.S. government’s right to keep or take a person’s personal property until that person takes care of unpaid federal taxes. The Internal Revenue Service will send a notice of federal tax lien that serves as a demand for payment. However, if taxes go unpaid, the IRS will place a federal lien on personal assets.” In some cases when the debt is very high, the tax authority can seize your property and sell it to pay the taxes. No one wants to be in this situation!
MECHANICS’ AND MATERIALMAN’S LIENS
These liens are filed with county records when a contractor or subcontractor has not received payment for work on your property. For example, when you have not paid your contractor for the beautifully remodeled kitchen, your contractor can file a lien against your property to ensure you pay them. This is where it get’s tricky – if you are trying to sell your house and have a lien on the property, this information will surface during the sale, and your buyer (if they still want to move forward with the deal) with likely insist that you pay the debt before closing.
A judgement lien is when a creditor can sue you. Nolo explains that, “Once the creditor has a judgment against you for a specific amount, that creditor can use methods to collect the money that are unavailable without a judgment.” This sounds detrimental to your credit, your financials, and your sanity!
Trusted House Buyers
If you have a lien on your San Diego house that you are wanting to sell and can’t pay off the debt, this is where Trusted House Buyers can step in to help. Trusted House Buyers is a cash buyer here in San Diego. We buy houses in any condition, and we work with homeowners facing various situations and circumstances, like a tax lien on the property. We can not only buy your house, but we have the ability to pay the tax liens through escrow. Not only does this eliminate law suits and the IRS tracking your down, but this allows you to walk away from your San Diego property with cash in your pocket. Many times homeowners with a tax lien on their property feel helpless and that there is no solution. When are faced with a stressful situation, Trusted House Buyers is known to walk homeowners through the house selling process. We will handle all the paperwork associated with the sale of your home and the tax lien. Our job is to make the house selling experiences as seamless as possible, so you can put this added stress behind you. Give us a call today at 619-786-0973 to see how we can help sell your San Diego house with a tax lien.