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What is a tax lien or tax judgment? |
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Answer
A lien consists of a creditor applying a notice of amount due to any property a debtor may have. This amount must be paid before the property can be sold.
A judgment happens when a creditors goes to court to obtain any amount owed. If you were to apply for a loan after a judgment is granted, you may have to pay the judgment before any other credit can be obtained.
Both items reflect negatively on your credit report and may prevent future credit. [sale or purchase]
Answer
In tax-speak, Tax Lien and Tax Judgment mean the same thing -- it is a public record, and a notice to the public that you owe taxes. Most tax liens attach to both real property and personal property.
If you own your home, the taxing agency that placed the lien against you uses a tax lien to create a security interest -- once the lien is filed, they are a secured creditor. If you try to sell your house, you will have to pay the lien off at the closing to ensure that you have a clear title to transfer. The taxing agency will be in line for proceeds based upon when they filed the lien.
First answer by Christina Athens. Last edit by TaxManEA. Contributor trust: 59 [recommend contributor]. Question popularity: 61 [recommend question]
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