State Lien

Like so many Americans, you might feel weighed down by your debt. It can feel suffocating and hopeless. The last thing you need is a tax lien notice from the state.

If you have received this notification, it’s time to take action. Before you do, however, let’s examine what a tax lien is, why it was issued to you, and how you can take care of this problem.

WHAT IS A STATE TAX LIEN?

A tax lien is a legal claim against your assets. News of a lien is readily available to credit reporting agencies and can have very negative consequences for your credit score. Any lender will be able to see the impact of a tax lien on your score. Even after you have paid off your tax debt in full, and the tax lien is finally gone, your credit report will still show that a lien was filed against you at some point in time.

A state tax lien is different than a state tax levy. Learn more about state tax levies.

This can make acquiring credit in the future very difficult though, not impossible. Additionally, your state has a right to seize your property, which may include your bank account, your car, or even your home.

The state can still seize your assets, even if a lien has not been filed against you. The lien just makes it public information.

WHY DID THIS HAPPEN?

If you haven’t paid your state taxes on time or have had difficulties paying the full bill after the notices started arriving, you can be at risk of having a tax lien filed against you. If filed, the state tax lien becomes a public record that is filed through your Public Recorder’s office. Once made public, the tax lien notifies all current and future creditors of your state tax debt.

As a result of the public nature of a tax lien, your name (or names, if there is joint liability) will be posted with the amount of the tax bill at the time of the lien filing.

HOW CAN YOU TAKE CARE OF THIS?

As you can see, the impact of a state tax lien can be severe. The issue demands a solution that is perfectly suited for your specific situation.

If you are a property owner, you’ll either have to pay off your state tax debts or negotiate a subordination prior to refinancing or selling your property. There are case-specific details to consider here, depending on whether or not the refinance or sale will cover the tax debt in full or only partially.

One way to remove a state lien from the public record and start building credit again is to have it released. If you would like to learn more about how to release a lien, download our free guide, which includes methods you can follow to release a tax lien and the steps you must take to get the ball moving.

Whether you think there is a possibility of the state filing a tax lien, you feel a lien has been filed unlawfully, or you are trying to resolve a current lien, resolving the issue should be your top priority. Remember, you can speak with a tax resolution specialist who has extensive experience helping people who have been through this ordeal.