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How bad do tax liens hurt your credit? I have 4 on mine. They are listed as possibly coming off between 2019 and 2021.
@Anonymous wrote:How bad do tax liens hurt your credit? I have 4 on mine. They are listed as possibly coming off between 2019 and 2021.
They are a major derogatory item and will definately hurt your FICO score. I believe that federal liens can be removed ( after they are paid ) - are yours state, fed or both ?
Both. Don't see them being paid unless I hit Powerball.
The period for exclusion of tax liens does not begin to run until the lien is paid.
I am curious as to why your CR would show a projected exclusion date on an unpaid lien. What is the reported status?
They are listed as being listed at the Registry of Deeds in my area. Each as the basic info about the lien and then at the bottom of it it notes - Estimated month and year that this item will be removed.
@RobertEG wrote:The period for exclusion of tax liens does not begin to run until the lien is paid.
I am curious as to why your CR would show a projected exclusion date on an unpaid lien. What is the reported status?
I don't think it's fully coded into the system: the CRA's have to drop them at the 10 year mark if paid, but unpaid is a little bit of a grey area; however, the lien holder can simply re-report it with impunity if it so desires if unpaid and I think this is what's typically done. I do know first-hand that an unpaid tax lien can drop off early (EQ, go figure that)
In theory it should just stay on there forever if unpaid, but I don't think the bureaus housekeeping batches work that way historically.
To the OP: look at the requirements for your state of residence, in some cases if you pay them they can be removed, and they're typically a fraction of the size of Federal liens. In the second case, you're sort of in the same boat as me (I did something incredibly stupid tax-wise circa 2000 and a summary judgement got entered in 2003): you can negotiate with the IRS either directly or through a third party, and there's 4 broad categories for appeal: one of them being no real ability to ever pay it back.
On the Fed side, if you either pay it (negotiated or otherwise) or enroll in a Direct Debit agreement (some monthly payment arrangement pulled direclty out of your bank account) you can get the lien removed from your records. This second option is what I'm looking at, like you I can't conceivably pay it outright and while you have to account for that in a DTI calculation, it's better than the alternatives.
Can you OIC them? Seems like if the amounts are that large, you'd be in Uncollectible Status...
Actually, I am listed as being uncollectable (state and federal). They did tell me that I am free to make payments at anytime and if my income increases, they may be contacting me for $.