Oh, man… Things can get tough at times. With so much going on ALL the time, it can be easy to get behind in some of your payments. And one of the payments people most avoid or try to push off is that big tax bill.
Let’s face it. Nobody likes paying their taxes. It’s confusing and can seem unfair at times, especially when you’re experiencing issues financially.
But the government wants their money. If you don’t pay them what you owe, they will take legal action against you, including putting a lien on your home. A lien on your property is an official declaration by the government of how much you owe in unpaid taxes.
So how can you get rid of a tax lien on your property? The most “simple” way to do it is to pay what you owe. Of course, this isn’t really simple at all because if you could pay it off, you would.
There is one solution, however, that actually can be simple. You can sell your house with a tax lien for cash. At Homes to Harmony, we work with people all the time who are dealing with a tax lien. We will walk you through the process and formulate a plan that works best for you.
What is a Tax Lien?
Before we get too far into selling your property for cash, let’s take a little closer look at what a tax lien is.
If you do not pay your taxes and have an outstanding balance with the government, they will put a lien on your house. This is a debt against your property which means that if you sell the house, you must first use the proceeds to satisfy the debt owed to the government. Then you get to keep the rest.
If you fail to pay these taxes and satisfy your lien, depending on how much you owe, the government can seize your home and foreclose on it.
Types of Tax Liens
There are four different types of tax liens that can be put on your home. Each lien is determined by the kind of taxes you owe.
- Property Tax Lien – If you fail to pay your property taxes, the county or city will put a lien on your house
- IRS Tax Lien – If you fail to pay your income taxes, the IRS will put a lien on your house
- Homeowners Association Lien – While this isn’t necessarily a tax, if you fail to pay HOA dues, they can also put a lien on your house
- State Tax Lien – If you fail to pay your state taxes, which are different from federal income tax, the state can put a lien on your house
It’s a lot, we know. It feels like everyone has their hand out trying to get money from you. It can really be overwhelming. If you already have a tax lien on your home, you might not even know where to start. Beyond quickly selling your home for cash, you do have a few other options.
Options to Satisfy Your Tax Lien
It’s important to remember that a tax lien will not take money directly from your pocket. It’s not like garnishing your wages. So it’s not time to panic as soon as you get a tax lien on your house. It doesn’t go away though. And your tax debt will grow due to interest the longer you take to pay it off.
Get a Certificate of Discharge
A certificate of discharge removes the lien from the specific piece of property. If you apply for and get a certificate of discharge that means whoever buys your home doesn’t have to deal with the tax lien. You still owe the money, but it’s attached to you individually instead of to your house.
Start a Payment Plan
Depending on how much you owe in back taxes, you may want to negotiate with the IRS to implement a payment plan. This can make it much easier to satisfy the lien and make it much more manageable for your finances.
It’s important to note that the lien must be paid off before the sale of the home can go through. So, if you plan to sell your house, make sure to get this payment plan in place well before you go to settlement.
Dispute the Lien
In some cases, you may be able to dispute the lien and avoid paying it back. However, this is a long and difficult legal process that requires a tax attorney.
If you actually do not owe the taxes the IRS claims you do then it’s crucial to dispute the lien. But this is not a “get out of jail free” card. It’s expensive and not many people win their case.
Pay the Lien at Settlement
The most common way to get rid of a tax lien is to satisfy it at the settlement of selling your house. When you sell your home, the first obligation will be to satisfy the debt to the government. You get to keep the rest.
Other than paying the lien off directly, this is the easiest solution. But it still involves finding a buyer willing to work with you.
Selling Your House with a Tax Lien
But what if you don’t want to even deal with that? Can you just sell your house quickly for cash even if you have a tax lien on it? Yes, you can.
Homes to Harmony will buy your house, make sure the taxman gets their money, and then let you move on from the situation. The only negotiation will be figuring out the best plan of action for YOU.
We will pay you cash for your house in the Chicago area – no matter what type of lien is placed on it. With our expert services, we will work with you to get you the best price for your home and help you satisfy your lien so you can start over fresh. Whew!
Contact us to see how much cash you can get for your house today!