Tax Lien On A Foreclosure
I have a friend who has a tax lien on his home and is now facing foreclosure. Investors are clamoring to get the house. It is very nice and in great condition. The outstanding 1ST AND 2ND mortgages are $130,000. The tax lien is $70,0000. He paid $155,000 about 3 years ago and the market value is about $190,000. What are his options if any?
His options are dictated by his intent. Does he want to keep the house?
If the situation that resulted in his default has been reversed... meaning that he is now able to afford monthly payments to keep the house... but cannot bring either his mortgage loan(s) current, or redeem the tax lien (unless it's an IRS lien) then he should discuss with his attorney a possible bankruptcy chapter 13 repayment plan.
If he doesn't want to keep the house... he could try to sell short, or, file Chapter 7 which may or may not address the tax lien ) and waltz away.
The $70K tax lien seems more like an IRS lien... than a property tax lien. If it's an older IRS lien it may, repeat may be negotiated. If it's a payroll tax lien... it'll need to be paid.