Recent Tax Lien Public Record

[ficonovice]

My credit was in the mid 700's up until a few months ago while I was in the process of purchasing a home. During the construction period (new home), a tax lien hit my credit reports which I haven't paid yet but will soon.

I was able to close on my home successfully because they didn't run my credit reports prior to settlement (thankfully).

Now, my mortgage hasn't yet appeared on my credit reports and probably won't until early March.

Questions:

With an open lien, are there any credit cards worth applying for with scores in the 680's and no other negatives?

If so, should I apply before or after my mortgage hits my reports?

Thanks!

[creditreformer]

some banks- wells fargo + poss. us bank + citi will AUTO deny you if you have an unpaid tax lien showing.  others are tax lien unfriendly, esp. if the lien is new.

 

some banks- merrick- will AUTO deny you if you have a recently obtained mortgate

 

some banks- nearly all of them- will/can do AA/RJ/CLD/close accts if they think you're seeking too much credit

 

btw BEFORE you pay, make sure the lien will be WITHDRAWN.  even if you pay the lien, it CAN stay on your reports for a # of years.

 

btw, be prepared for the irs/state tax board to take out ANOTHER lien against your property once they discover it.

 

tax liens are a BEAST

[smallfry]

Tax liens remain on your reports 7 years from the date you pay it off. 

[MojaveMoon]

Is it true that you'll only be threatened with a tax lien if the IRS contacts you about backtaxes and you say (by words or actions), no way .. I'm not paying

In other words, if they feel you owe additional back taxes and if you are immediately cooperative and make arrangements to pay either all at once or with a payment plan, are you safe from ever having to worry that they'll still go ahead and put the lien on your report ?

Message Edited by MojaveMoon on 02-03-2009 03:51 PM

[MojaveMoon]

Other question.

Is there a contradiction between what creditreformer and smallfry said ?

"btw BEFORE you pay, make sure the lien will be WITHDRAWN. even if you pay the lien, it CAN stay on your reports for a # of years."

"Tax liens remain on your reports 7 years from the date you pay it off."


It sounds like one person is saying that once a tax lien is on your report that you can request at any time that it be withdrawn, while the other person seems to be saying that a tax lien can never be withdrawn from the report.

Or is one person saying that the tax lien be withdrawn ... but ONLY if the request is made prior to paying the tax lien -- If the request is made after the tax lien is paid, then it's too late

[WhirledPeasPlease]

While I normally don't advocate duplicate posts, you're bound to get more answers to this on Rebuilding.

[smallfry]

---

@MojaveMoon wrote:
Is it true that you'll only be threatened with a tax lien if the IRS contacts you about backtaxes and you say (by words or actions), no way .. I'm not paying

In other words, if they feel you owe additional back taxes and if you are immediately cooperative and make arrangements to pay either all at once or with a payment plan, are you safe from ever having to worry that they'll still go ahead and put the lien on your report ?

Message Edited by MojaveMoon on 02-03-2009 03:51 PM

---

I know people who have unpaid back taxes for 15 years never got a tax lien. It's a roll of the dice.

[smallfry]

---

@MojaveMoon wrote:
Other question.

Is there a contradiction between what creditreformer and smallfry said ?

"btw BEFORE you pay, make sure the lien will be WITHDRAWN. even if you pay the lien, it CAN stay on your reports for a # of years."

"Tax liens remain on your reports 7 years from the date you pay it off."


It sounds like one person is saying that once a tax lien is on your report that you can request at any time that it be withdrawn, while the other person seems to be saying that a tax lien can never be withdrawn from the report.

Or is one person saying that the tax lien be withdrawn ... but ONLY if the request is made prior to paying the tax lien -- If the request is made after the tax lien is paid, then it's too late

---

Once the lien is on the reports you have to dispute it off. Make sure you do it correctly the first time or it will most definitely remain for the full 7 years. Make sure to investigate how to do it before you attempt to do dispute.

Message Edited by smallfry on 02-03-2009 08:52 PM

[creditreformer]

Mojave, the irs can/has issued tax liens on anyone who (according to the irs) owes taxes. I've seen liens filed for $50 + i've seen liens filed for $100k+.  I've seen duplicate liens filed- and good luck getting THOSE removed.  I've seen liens renewed.  I've seen liens filed ERRONEOUSLY.

Once the lien is on your reports, it is VERY hard to remove.  There’s a conflict between the bureaus on how long liens stay on your reports.  It is VERY much ymmv and you have to be VERY careful on how you approach it.  there’s a difference between a lien being released + a lien being withdrawn. 

 

Another sticky issue is that liens can be RENEWED which often resets the clock for reporting.  Another sticky issue is that the date for removal purposes starts when the lien is PAID, not the date the lien is filed.  Unpaid liens often drop off after 10-15 yrs (sometimes early- again ymmv), but if you pay in say yr 9, the lien then stays on your reports for another 10 yrs.  As I said, liens are a BEAST + it is very hard to recover fico wise.  not to mention, liens can lead to liens against property, bank accts garnished, wages garnished + a whole host of other less than pleasant things.

depending on the $ amount involved, it may be prudent to contact a tax/legal professional.

[MojaveMoon]

Thank you both for the replies. I'm still unclear about three things.

I have a better understanding now about tax liens *after* they've been reported on your credit report.

But I don't understand the concepts of "tax lien being released" and "tax lien being withdrawn". Apparently these are things that can only take place so long as the tax lien has not been put onto someone's credit report ? It also sounds like when the IRS assesses a lien that that does not necessarily mean that the IRS is going to put that lien on your credit report -- they might ... or they might not

The other thing I'm not clear on is that I thought a tax lien was just a punishment used by the IRS when all other attempts to get the citizen to pay backtaxes have failed. You both appear to be saying that the IRS sometimes puts a lien on the credit report and *then* contacts the citizen and says,

"oh hey, hi there, how are ya .. guess what .. ya owe us money and not only that but we went ahead and put a lien on your report before we decided to contact you and even once you pay us your credit's now messed up for the next seven years."

Message Edited by MojaveMoon on 02-05-2009 11:08 PM