Avoid Tax Lien Foreclosures

Two scary things in today’s economy are taxes and foreclosures. Put those together and you are facing the possibility of losing your home. Most people don’t realize that even if you are up to date on your mortgage payments, a tax foreclosure can still force you out of your residence.

Failing to pay your property taxes allows the county of your residence to place a tax lien on your property. Luckily, there are many ways to avoid tax lien foreclosures.

The Steps

First, it is important to reach out and contact your elected county official. They can help you determine if a partial payment of your taxes is permitted. Even though procedures do vary depending on your location, the local government is a resource to provide options for people having problems paying their property taxes especially those attempting to avoid a tax lien foreclosure.

The next step is to request an extension to pay the tax bill through an appeal to the local authorities. Showing up in person is ideal to ensure you have a real live person to review your written plan that details how you propose to pay the bill in full.

By meeting in person, you also will have a better chance of negotiating other terms if they do not accept your original proposal. Be sure not to make promises that are unrealistic and only offer payments that you are 100% sure you can make on time and in the full amount.

You also have the option to petition for an "Offer in Compromise" from the local government. This can be part of your original proposal or a deal you make in person to settle the tax debt for less than requested.

The beauty of filing this petition is that the lien on your property will be removed as soon as the offer in compromise is accepted and the funds have been applied to your account.

Another way to avoid tax lien foreclosures is to ask for help from the various aid agencies in your area. Inquiring with the social services department for the names and addresses of organizations that assist those experiencing economic hardship will give you a go-to list for resources available.

Even though these organizations may not pay your property taxes in full they should be able to offer you financial aid for other financial obligations while you are working towards paying off the property tax bill to avoid a tax lien foreclosure.

Another great option if your credit is good is to take out a loan to pay your property taxes. Ideally this would be a loan between you and a friend or family member where the interest rate is simple and reasonable.

However, if that is not an option, you can consider a bank loan but beware of high interest rates, which can cause even more financial hardship. It is always best to scrutinize the terms of a loan before accepting it.

Lastly, if all else fails, bankruptcy may be the only solution to avoid tax lien foreclosures. This is a worst-case scenario and should not be undertaken without first consulting an attorney.

© 2006 Tax Foreclosure Current Events