A lien is a type of loan that is connected to the house, and they come in many forms. Regardless of the type of lien, however, a lien follows the home, not the homeowner, which can make selling difficult. If you would like to know more, check out these three common types of property liens.
1. Tax Lien
Tax liens may include property taxes or federal taxes that you have yet to pay. Typically, before a tax lien can be placed, you must be behind on taxes, the IRS must have sent you a bill, and you must have ignored or refused to pay the bill.
If you can pay the taxes in full, the lien will naturally be removed, but many people fall behind on taxes because they simply don't have enough money. If this is the case, having the property discharged or foreclosed upon you may be the only way to repay the lien. If you qualify and have been paying your lien regularly, it may be withdrawn. This doesn't mean you don't still owe the tax money, but it does mean the house no longer has a lien.
2. Judgment Liens
A judgment lien is one that has been ordered by the courts. It is common for child support, but it can also include unsecured debt like medical bills and unpaid credit cards. Of course, unsecured debt like medical bills and credit cards can be dissolved in bankruptcy, so that can be one way to avoid or get out of a lien.
Secured debt, however, like child support cannot be discharged via bankruptcy. Therefore, if you can't pay back child support, a lien may be placed on the house. In some cases, the judge may use a lien to help pay for your fees and fines after being convicted of a crime.
3. Construction Liens
Construction liens can include liens placed upon you by individual contractors or the government. If you hire a contractor and refuse to pay them, they may be able to put a lien on your home to recoup that money. Of course, you can avoid this type of lien by not ordering services you can't afford. You can also talk to the contractor about a repayment plan.
In some cases, however, the government puts a lien on your home. For example, if the government keeps telling you to cut down a tree that is dangerous and/or complicating powerlines and you refuse to do it, they will send someone out to fix it for you, and then they will bill you. If you can't pay, they may put a lien on your home.
Liens are problematic, especially when it comes to buying and selling a home. If you're in the market for a new home, you need to know exactly what you are getting yourself into. If you would like to know more, contact a lien search provider in your area today.