When people face tax trouble, it’s possible they’ll end up with liens placed on property. The IRS doesn’t play games, and a lien can spell major trouble both for homeowners and business owners. When you get behind on taxes, the IRS has the right to place a lien on your business. If you fall behind on residential property taxes, you can incur a lien on that property. Moving forward financially is difficult as long as you have that lien hanging over your head. With this in mind, many property and business owners seek out a loan to help them get out from under a lien situation.
Loans for homeowners who fall behind
Homeowners often have property tax obligations that must be satisfied. Those property taxes are levied by the county or state, and are typically used in order to fund schools and other local projects. If you fail to pay, you could find a lien on your property. This means that you will have trouble selling your home, and you might even have a hard time borrowing against your home. Importantly, you can even run into issues with your mortgage provider if that lender has a provision against liens on mortgaged property. People in this position often seek out loans that can help them get back on their feet.
How tax lien loans help homeowners
People who find themselves behind on their property tax payments can find lenders to bail them out. Lenders pay off the lien in exchange for a new, separate lien. The lender will then have his own lien on the property, allowing the homeowner to pay off that new lien over time with a payment plan. Some homeowners might wonder why it makes sense to exchange one lien for another. As many income tax professionals will tell you, it is better to owe almost anyone other than the government. Lenders are more accommodating and allow homeowners to work their way out of a hole in a timely fashion.
When business owners get behind on their taxes
Homeowners aren’t the only people who can fall behind on their taxes. Business owners can run into problems of their own when it comes to the IRS and income tax. Failure to pay income tax obligations is one of the top reasons why the government might place a lien on a business. That lien can be a major problem. It goes in the public record, ensuring that any business deal in the future becomes much more difficult. In addition to hurting the public reputation of the company, this kind of issue can create cash flow problems.
The solution for business owners in need
Business owners who fall behind on their income taxes can find a way out of trouble with the IRS. There are lenders out there that specialize in giving business owners cash to get rid of the lien. The new lender is essentially providing a cash advance against future revenue. The new lender will be paid back by the future accounts receivable that the business owner has. If you have a past obligation but intend to have significant future revenue, then this can be a great solution to bail you out of a hole that might strip your business of its operating function.
At the end of the day, business owners and homeowners don’t have to go through a difficult situation alone. When you fall behind on your tax obligation, you have the unique ability to leverage a new loan that will provide a temporary reprieve. This can help you come up with a new long-term plan.