The Low-Down on Tax Liens

Written By:

shutterstock_11034796In case you’ve been zoning out or just way too busy to pay attention, we’re smack-dab right in the middle of tax reason and the deadline to file is less than a month away (Monday, April 15, 2013).

During the past few weeks, our inbox at has been filling up with different questions about tax liens. We did our research, removed all the confusing details, broke them down into simplified answers – and laid them all out for you right here.

What is a tax lien?
My handy-dandy Webster’s New World Dictionary describes a lien as a legal claim or hold on a person’s property for payment or satisfaction of a tax debt. In other words, it’s a piece of information that tells the whole world you owe someone some money.

A tax lien is placed on a person’s property (personal or real estate) because of a failure to pay income or other taxes associated with the property. For example: If you owe $3,000 in delinquent taxes and don’t pay up (because you forgot or just failed to do so) – there’s a pretty good chance you’re going to get slapped with a lien on your property.

How does a tax lien affect you?
Among other things, a tax lien may restrict your ability to get credit (buy a home, refinance, or open new credit cards).

Will a tax lien show up on my credit report?
You bet it will. A tax lien is a public record – meaning it’s a piece of information that’s not considered confidential. It’s information that’s collected and reported regularly by county, state and federal courts.

There are three different kinds of public records that can appear on your Experian credit report in Quizzle: bankruptcy filings, tax liens, and judgments. And, because public records may reflect poorly on your credit score, it’s important to check your report regularly to make sure information is up-to-date and correct.

Unpaid tax liens can remain on a credit report for 15 years (that’s longer than any other item in a credit report) and paid tax liens can remain on a credit report for at least seven years from the date they are paid.

Not sure if you have a lien on your credit report? Find out right now at

How can I get a tax lien removed?
Paying the tax debt in full is the best way to get rid of a federal tax lien, according to the IRS. Once the debt is paid off, the IRS will release the lien within 30 days.

How can I avoid a tax lien?
The easiest tax lien question by far, the answer is simple – pay your taxes on time and in full. If you owe and can’t pay the full amount look into securing some sort of possible payment options – but whatever you do, don’t ignore it – it’s not going to go away on its own.

[Mortgage Help: Get your free credit report and see if your credit score is mortgage qualified]

author avatar

Krystal lives, works, and plays in the Detroit area and loves covering a variety of personal finance topics for the Quizzle Wire.