withdrawn once full payment of taxes is made upon the taxpayer’s request. In some cases, the federal government will issue a tax levy — a legal claim made against the property that grants the government authority to seize the property to satisfy the debt. At this stage, you could also lose wages, vehicles, and other personal property as a means of satisfying your debt. In some instances, the IRS will let other creditors take their debts before the IRS as they may also make a compromise that allows the taxpayer to pay off the debt in small instalments.
SELLING A HOME WITH A LIEN
For some people, using the equity in their houses to pay outstanding debts or loans, including their property taxes, is the only option available. There are a few ways to use home equity to pay debts. One choice is to remortgage the home. Another is to sell the property altogether. Remortgaging (or refinancing) property has the advantage of drawing down equity such that one has additional capital to service debt. It’s trading an asset (ownership in your house) to eliminate a liability (personal loan, credit card debt, and current amount of delinquent taxes). The proceeds obtain through refinancing the mortgage can be used to pay off debt. In this manner, a homeowner who has several smaller debts, such as multiple credit card debt at interest rates approaching 20%, may consolidate all debts into one lower monthly payment on a loan with significantly smaller interest. This is more manageable on a cashflow basis than a situation in which one has many unpaid, disparate loans. The homeowner should approach several different lenders to shop for the best 114
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