Selling A Home With a Tax Lien? Educate Yourself On The Process!

For homeowners who have tax liens on assets they are trying to sell it is important to understand how it will affect the sale. The debt can be made up from federal taxes, income, payroll, sales, city or local tax. This shows that tax liens can vary greatly and be caused by many different types of tax debt.

When a lien is put on a property its purpose is to act collateral for the debt that is owed. When a homeowner owes the government back taxes they may have a lien put on the house. The lien will remain until you pay off your debt. For some debtors, selling the home may be the only way to pay off the debts. 

Tax lawyers in Chicago will tell you that if there's a lien on your home it means you cannot refinance or sell your home unless your debts are paid. This makes selling a home that has a tax lien against it a little complicated.

If you have enough equity in your home you can sell it through the traditional channels however at closing the debt owed in the tax lien will be deducted before any remaining money is given to you. In Chicago, real estate attorneys have been watching home values decrease. This means that if you have lost some value in your home, it may be difficult to get enough equity out of your home through a sale. If the sale of your home would garner less than the debt you owe then you can work with and IRS tax attorney and try to obtain an IRS discharge.

If you want to pay off your lien and remain in your home, it might be best to contact your mortgage lender. Depending on the amount, they may pay the tax lien off for you and add the additional debt onto your monthly mortgage fees.

Your Chicago real estate attorney and IRS tax attorney will agree that it is best to avoid tax liens but if you have no choice then you should work on making payments as often as possible to pay down the debt quickly.

Chang and Carlin
The content found on the Chang & Carlin site is not legal advice and is purely for informational purposes. The information contained herein is not a substitute for the advice of an attorney and does not create an attorney-client relationship. If you are interested in obtaining information about chapter 7 bankruptcy, chapter 13 bankruptcy, foreclosure services, real estate legal services, you are encouraged to call our law firm at 866-790-8601 a Free Legal Evaluation. Chang and Carlin serves clients in Chicago, Schaumburg, Joliet, Warrenville, Waukegan, Illinois.


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