You owe back taxes. However, you find you are in a tough situation because you cannot afford to pay. If you have valuable real or personal property – say, a home, a car, or a boat – the government might impose a tax lien to collect the debt. That means if you are unable to pay the taxes owed, the government – state or federal – sells your real or personal property to satisfy the lien.
A lien gives the government a legal claim to your property as security or payment of your tax debt. A tax lien is only issued after the government assesses your liability and notifies you how much you owe. If you neglect or refuse to pay within a specified period, that’s when they file notice of a lien. Creditors will be notified, and your credit rating may be harmed.
It’s that simple.Best Tax Relief Companies
What’s not so simple is the amount of interest, additional tax, and penalty that can be added for continued non-payment of taxes. Additionally, you have to pay for any fees required to file and release the lien. The debt continues to grow and grow.
However, you have options. You can pay the full amount you owe the government. You can give up ownership of the property. You can seek help through a debt settlement program.
If you find yourself in a difficult financial situation because you owe federal and/or state back taxes, debt settlement may be your answer. If you have other unsecured debts such as credit card, a school loan, even a car note, debt settlement may be your answer.