Will a Tax Lien Foreclosure Affect my Credit?

If you’re behind on your taxes with a lien on your home, you may be concerned about a tax lien foreclosure and the consequences it will have. Losing your home may be something you’ve accepted, but will you be able to buy or rent another home? Will a tax lien foreclosure negatively affect your credit? It’s important to understand your options and the potential consequences as soon as possible.

Credit Ratings After a Foreclosure

According to Bankrate.com, a tax lien on your home won’t negatively affect your credit rating. The three major credit bureaus no longer include state or federal tax liens on your credit report. However, it’s a different story for a foreclosure. A foreclosure will hurt your credit and remain on your credit report for seven years. The greatest impact on your score will happen immediately after the foreclosure, and its impact will diminish over time.

Avoiding a Tax Lien Foreclosure

The best way to protect your credit is to avoid a tax lien foreclosure. In some cases, you may be able to abate or stop a foreclosure before it happens. 

1.    Pay the Overdue Amounts

You can “redeem” the property before a sale if you pay off the overdue amount. You’ll have to pay any judgment, interest, penalties, and costs, but redeeming the property will stop the foreclosure and release the tax lien.

2.    Deferred Tax Collection

If you are over 65 or disabled and occupy your property as a “residence homestead,” you may be able to abate a tax lien foreclosure and defer collection of your delinquent taxes. 

3.    Contact Your Mortgage Company

If you have a mortgage, consider contacting your mortgage company to see if they will pay the taxes and add the amount to your lien. You may also be able to consider a home equity line of credit or a reverse mortgage to pay your delinquent taxes. 

You may also have options to redeem your home after a tax lien foreclosure. An experienced foreclosure attorney can explain your options.

You need the Skilled Foreclosure Lawyers at Manfred Sternberg & Associates

If you’re facing a tax lien foreclosure, it’s important to understand the potential consequences and your options. Navigating the process can be challenging, but an experienced Texas foreclosure attorney can help guide you and protect your rights. Call the seasoned tax foreclosure attorneys at Manfred Sternberg & Associates at (713) 547-5460, or contact them online to schedule your consultation.