What is a Government Tax Lien?
In the US you are required to pay taxes on your property as well as your income. If you fail to pay these taxes the government can step in and put what is called a tax lien on that property or income. This basically means that the government has put a hold on your property in order to obtain the back taxes owed.
Say for example that you own a house and have allowed your taxes to become delinquent. The government will then put a hold on that property (house) which gives them the right to then either set up a payment plan with you or move on to a levy. The levy would then allow the government to seize the property and sell it in order to obtain the taxes owed.
Once a government tax lien has been placed on your home you can then choose to abide by the payment plan or sell the home. If you sell the home and the sale amount is not enough to pay off the back taxes you have additional options. You may sign a release of the lien which will then make the taxes owed the responsibility of the new owner. Another possibility if the sale does not cover the tax lien could be that the government puts a lien on other property you own and/or begins a wage garnishment which allows money to be taken from your paycheck until the debt is repaid.
If you are facing a government tax lien it would be wise to contact a lawyer and try to work things out with the government before that lien turns into a levy.
