Selling Your House With Liens or Tax Problems In Philadelphia
As a homeowner in Philadelphia, it may seem difficult to sell your house with liens or tax problems. If you don’t have the cash to pay
off the debt, you could be stuck with the property for much longer than you would like. Holding on to the property to long can drive you even further into debt. In this post, we review property liens along and how to sell your house no matter what the problem.
What Is A Lien?
A lien on your house is a legal claim on your asset, which allows the holder to ask the court to sell the property if the debt is not paid. A property lien must be filed and approved by a county records office or state agency. A formal notice is typically delivered to the property holder with specific terms notifying them that action has been taken to secure a debt by placing a claim against the property.
What are the different types of liens in Pennsylvania?
- Mortgage: In the case of real estate, nearly all lenders will file a lien on your house in the form of a mortgage. A mortgage is when you pledge your house as collateral to guarantee the loan terms specified in the lenders mortgage note document.
- Mechanics lien: When hiring contractors for home improvements in Pennsylvania, if the homeowner has a dispute with the contractor that results in non-payment of the contractors bill, the contractor can file a mechanic’s lien for the unpaid balance. In Pennsylvania, mechanic’s liens expire 5 years after the date of filing.
- Judgement lien: When a creditor or contractor files a lawsuit and the court issues a verdict in their favor, they receive a judgement with an amount. That judgement can be attached to any real property, including bank accounts and real estate, to prevent the asset from being sold without paying the creditor. Judgement liens expire after 5 years, and lose priority unless a creditor revives the lien for an additional 5 years. Credit Cards and other unsecured loans can also become liens against your property.
- Tax Liens: In 2014, Pennsylvania enacted Act 93, which permits government entities at the state, local, and federal level to file delinquent taxes with the County prothonotary, which formally recognizes the delinquent taxes as a lien.
- HOA and COA Assessments: In Pennsylvania, most HOA’s and COA’s are governed by the Uniform Planned Community Act (aka PUD). The Associations effectively have a perpetual lien on properties within the PUD. In Pennsylvania, a HOA or COA lien has priority over all other liens except mortgages and taxes. However, under certain circumstances, 6-months of unpaid assessments have a “super-lien” status.
Note: Liens and creditors rights in Pennsylvania are complicated legal topics. If you receive notice of a lien placed on your property, seek qualified legal advice from a licensed PA attorney.
What happens after a lien is filed?
If the homeowner isn’t able to pay off the lien, the issuing party has the ability to foreclose on the property. By placing a lien on the property, the creditor stops your ability to sell the house until the debt has been repaid in full. Typically, it’s the lien holder in first position (first filed in Pennsylvania) that would push for a foreclosure. You can read more about liens here: Investopedia
Sell Directly To SellPAHomeFast
With a direct sale of your house to SellPAHomeFast, you will be able to leave the liens and tax problems behind. You won’t have to find the money to pay off liens or to pay off your back taxes. We will handle all of the debts, while quickly and efficiently buying your property for an excellent price. All of the hassles, headaches, and further damage to your credit rating could be over in only a matter of days. Selling your house with liens or tax problems fast in Philadelphia is an option to help restore or protect your credit rating.
Create A Repayment Plan
While paying off everything you owe all in one shot can feel overwhelming, many creditors will work with you to create a payment plan to help you pay off your debt. Before you feel too defeated, reach out to the creditor to try to work something out. Ultimately, their goal is simply to collect what they are owed. Making an effort will help your creditors more forgiving and willing to work with you. Once the liens are lifted from the property, you will be able to sell your house, but this can take a considerable amount of time depending on how much debt you are in. When working to pay off the debt, it could mean that you end up holding onto your house for longer than you wanted to. Once your debt is repaid, you will be able to move ahead with the sale of the property, but you may miss out on some great opportunities while you wait.
Dispute The Lien
If a lien has been issued against your property that you disagree with, not all hope is lost. You can dispute the lien and make your case in court either by filing paperwork or appearing before the judge. You’ll need to have supporting documentation and a valid case against the creditor. To strengthen your argument, you’ll want to start fighting the lien as soon as it is placed against your home, if not before. Ultimately, preventing a lien from being placed on your property is the best defense. Typically, there are a number of requirements a creditor must meet, and filing a lien incurs costs. So a creditor has probably already done their homework on what they are rightfully owed.
If you are disputing a lien based on poor performance by your contractor, keep detailed records of what you were promised, what you received, and all of the money you spent to fix the errors. Be sure to include inspection records, dates, and photos with your other evidence.
Consequences of Not Resolving Your Liens and Tax Problems
Ultimately, if certain liens go unresolved you run the risk of losing your home. When liens go unpaid, the creditor has the ability to foreclose, assuming ownership of the property themselves. If you have a lien on your house or if you have problems paying the property taxes, you will want to take action right away. Reach out to your creditors to resolve the situation, or work with the team at SellPAHomeFast to sell your house right away.