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What can happen after a property tax lien is issued?

When local tax officials believe someone has failed to pay a property tax bill, they might issue a lien. At this point, individuals must work to resolve their debt, or they could have their property repossessed. Obviously, this can create an entirely different set of problems.

After getting notice of a tax lien, many people may not know what to do or exactly what's at stake. In order to minimize the negative consequences of tax debt, it may be helpful to work with an experienced attorney. At this point, the options available to resolve the lien and move forward might become clearer.

Although the story doesn't take place in Minneapolis, readers may be interested to hear the devastating effects of property tax liens on some Washington, D.C., homeowners. According to reports, District officials allow unresolved liens to be sold to investors after one year. Unfortunately, these investors are allowed to begin foreclosure proceedings and sell the house, without any involvement of mortgage lenders or local authorities.

As a result of this policy, several people have been kicked out of their homes as the result of unpaid tax bills. Shockingly, some of these tax debts were as small as $100 -- or less. In other words, failing to resolve relatively small tax debts caused people to lose essentially everything.

Although these tax lien policies aren't enforced everywhere, they aren't exclusive to Washington. It's understandable that homeowners can become overwhelmed by all of their regular expenses, so property tax payments simply become unmanageable. If this is the case, there may be ways to settle the debt without having to worry about losing property.

Source: Washington Post, “Homes for the Taking,” Michael Sallah, Debbie Cenziper and Steven Rich, Sept. 9, 2013

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