There are many reasons why we often find ourselves in a bad financial situation. For one, this could be due to wrong financial decisions, or it may also be due to mismanagement of assets.
Either way, both can induce a significant problem to your status as a taxpayer to the government, and in consequence, a tax lien may be filed to all of your assets.
As much as possible, you wouldn’t want this to happen, but in any case that it does, you may need to sell your home for cash to settle tax lien.
There are many alternative solutions to pay your debt to the Internal Revenue System (IRS) but sometimes, all that you have left is your house and now selling a home with tax liens may be your last option.
Before you sell a house with a liability on charges, it is important to determine what happens when you have a lien on your house, and you can do so by consulting your legal counsel or your attorney.
Sell Your Home For Cash To Settle Tax Lien But, What Happens When You Have A Lien On Your House?
As mentioned above, making bad decisions with your finances, coupled with your mismanagement of assets can lead to serious setbacks. As you make more debts with various agencies, you are slowly drowning yourself in bad credit. In consequence, this can also lead you to evade your taxes, leading the IRS along with the other creditors to file a tax lien on all your assets.
This can mean bad news for your real estate property, given that a person with too many insolvencies will find it difficult to pay the money that they owe to the federal government and the creditors. With this in hand, understanding how the entire process works on your properties can be helpful for your settlement cases. This can help you prevent from becoming a delinquent who is why you need to consult with a lawyer to check if selling your home can be done to pay off your debts. This leads us to the next question, “can you refinance with a lien on your home?”
Can You Refinance With A Lien On Your Home?
As mentioned above, it can be possible but difficult. When a house with a tax lien is on sale, the liabilities that come along with the property are normally passed on to the next owner of the property. The good news for you may mean bad news for someone else unless the new owner thinks otherwise (if your property had a high commercial value and he or she can buy it with a low price). There are some loans like consolidation loans, who offer to refinance your property and pay off your outstanding personal debts. As a word of advice, you have to make sure that you settle your payments fast (and on time) as your lender collects the fee, especially that this may mean compounded high-interest rates.
When Do Tax Liens Come Off Credit Report?
Knowing when your tax liens come off credit report is important because it can help you detach yourself from any liability. As much as possible, you do not want the IRS to file a tax lien on your properties as it may take a few years before they come off with your documents. This may mean that even if you have settled all your debts and you already have a good credit score, your attached liabilities may still haunt you in the future should the need for mortgaging your properties arise again.