Tax Lien Certificates Guide

Posts Tagged ‘Tax Lien Certificates’

Element of Risk Associated with Investing in Tax Lien Certificates

Although you enjoy the benefit of investing in tax lien certificates, you have also to consider what your rights to the property are and/or the assets of the property owner, for these rights interact with the rights of other people from whom the property owner may owe money.

What Happens to your Tax Lien Investment if the Homeowner Declares Bankruptcy?

Some tax liens are the results of short-term financial disruption that made the property owner lag behind in payments for the owner might be having serious financial distress which could be the reason why he missed payment of federal and/or state income tax, mortgage, installment debts and other payments. He may be planning to file bankruptcy for the bank or lender who issued the mortgage may be filing a foreclosure. The Internal Revenue Service and/or state taxing authority may be preparing to pursue wage suit or other collection strategies.

If property owner does not assume his responsibility, you as the owner of the tax lien certificate may not be the only person he owes money. And being among his creditors, your investment will be greatly affected and how much you expect to recover.

Among the creditors, federal and state taxing authorities are the priorities while the creditors are last in line. The IRS is allowed by their mandate to be ahead of federal government with regards to taxes. Another factor is the timing and timeliness with which creditors file for payment maybe also used to determine the order of payment through the sale of a property or in a bankruptcy settlement.

When looking at tax lien certificates as your investment vehicle, you have to consider these factors. Our Company is always at your service to guide you through the process, sharing with you our expertise that is appropriate to the local requirements of US real property and tax laws.