Disclaimer: The below is solely intended for informational purposes and in no way constitutes legal advice or specific recommendations.
In a nutshell, liens are “any official claim or charge against property or funds for payment of debt of a debt or services rendered,” according to Law.com. In layman’s terms, liens are the documents drawn up by a person who claims that another person (such as a customer) couldn’t afford to pay the full amount for a possession or a service — essentially, liens are a claim of debt. They are common in a number of sectors, including medical and real estate. For example, a contractor may place a lien on a house whose owner couldn’t afford all the renovations. In the same vein, a property tax lien or IRS lien record is a result of unpaid taxes.
Mortgages and auto loans are both types of liens: they both ensure that the creditor or financial provider can claim the property if the owner cannot afford to pay for it.
There are two types of liens that can be placed on property: a voluntary or an involuntary lien. A voluntary lien, such as a mortgage, is where a homeowner agrees to by entering a financial contract. This contract ensures that the homeowners will pay their debt, but does not negatively impact the homeowner or the property’s value.
However, an involuntary lien, also known as a mechanic’s lien, is placed on a property when a homeowner cannot pay for home improvements, a tax bill, or another outstanding charge relating to the property.
When placed on a house, an involuntary lien ensures that a homeowner cannot sell the property until the lien is removed, so it’s important to check the history of a property before making a commitment to buy it. The current owners may not even be aware that one has been placed on their property, so a quick people search or background check is part of your due diligence. This simple step can give you peace of mind.
There are several ways to conduct tax lien searches, which can be done online or in-person at the county recorder, clerk, or assessor’s office.
If a lien has been placed on your property, it can affect everything from your credit rating to your job hunt, and even your personal relationships. However, there are ways to remove the lien placed on you or your home.
Liens are not uncommon and, because they’re particularly difficult to scrub from the public records, they are easily searchable online. Search tools are available, but a simple property search can uncover any property or tax liens. Using an online service, you can plug in the address of the home you are looking to buy and there’s a good chance the information you are looking for will be available.
If searching online doesn’t help, you can go through physical written records at your county recorder, clerk, or assessor’s office. These documents should be readily available, and the individuals working in these offices can help you with your research.
Involuntary liens are notoriously difficult to remove from the public record, but there are steps you can take to clear your name. It’s generally advised not to file for bankruptcy, as this will only make it easier for lien holders to collect the money they are owed.
In addition to paying off the lien, you can remove it by granting ownership to the lien holder. While this isn’t ideal, this is often the only course of action available to many. You can also claim in court that the amount you owe is unreasonable — depending on the situation, this could results in the removal of the lien.
If you pay off your debt, expect to receive a release from any government holder of involuntary liens (such as tax or IRS ones) within 30 to 60 days of your final payment. If you do not receive one, contact the agency to confirm your release. They must be notarized in order for them to be valid, and can be submitted to the county recorder’s office to have the lien totally removed from your property.
Want to know more about lien scenarios and search options? Visit the BeenVerified blog for more information.