Delinquent property taxes can sometimes cause a slew of problems. For one, they can lead to liens on homes or businesses. And if you’re already up against a number of financial woes, it can be tough to cover the payment that you owe. With property tax liens, if you don’t resolve them in a timely manner, your property could be sold or you could default on your mortgage. And what about your credit? Will being late on your property taxes damage your credit score? Keep reading to find out.
How Do Property Tax Liens Work?
When delinquent real estate taxes aren’t paid, the city or county where the property is located has the right to file a legal claim for the property, in the form of a tax lien, for the amount owed. Once a lien is placed, it could possibly make it trickier for you to sell your home, especially when an offer on your home isn’t enough to cover the mortgage and the lien.
In many states, it’s actually possible for private investors to purchase tax liens from taxing authorities. Municipalities will often sell liens because they can get the money that they’re owed right away. These funds can then be allocated to cover community needs like emergency services, education, maintenance and other public services.
Depending on the area, tax liens can be sold for the outstanding amount that’s owed to the municipality or a great deal more. Once an investor purchases a lien, they are generally entitled to collect the same amount of interest and/or fees that would have been due to the municipality for the delinquency.
If the lien is not paid off after a set period of time, the lienholder can foreclose on the property. Most of the time, it won’t get to that point since property owners tend to pay within a reasonable period. But it can come to this if the lien is not satisfied.
Do Delinquent Property Taxes Affect Credit?
There was a time when tax liens could turn your credit score upside down. The damage was along the same lines as bankruptcy or even foreclosure. And when a tax lien did hit a person’s credit, it could prevent approval for credit cards, jobs, housing or even loans. And even if you paid the lien off, it could stay on your credit report for up to 10 years.
In 2017, things took a turn for the better. Because of inconsistencies in reporting liens to credit reports or linking liens to the wrong people, Experian, TransUnion and Equifax decided to eliminate civil judgment records and some of the tax lien data on credit reports. By April of 2018, all tax lien information was removed from credit reports.
Even though tax liens won’t show up on your credit, that doesn’t mean you need to risk pushing the process to the brink of foreclosure. If you’re having trouble managing debt that stems from your delinquent real estate taxes, Tax Ease can make the experience less of a burden with tax relief.
Need Help Paying Back Property Taxes? Trust Tax Ease
It’s no secret that Texas has some of the highest property taxes around. If you are having trouble paying yours, Tax Ease can get you back on course with delinquent property tax help. Since 2003, we’ve helped protect tens of thousands of people from foreclosure and financial ruin with hassle-free property tax financing. We believe in providing a solution that works with your budget. We don’t tack on initial costs or application fees. Instead, we offer affordable payments, free quotes and exceptional customer service from start to finish. Contact us today to learn more about our residential and commercial tax lien loans, today.
