First thing’s first: What exactly is a tax lien? A lien is a charge placed on property when there is an obligation or debt that needs to be paid. If you fail to pay the lien, you face the possibility of foreclosure. Yikes. Luckily, tax liens can be taken care of before reaching the foreclosure stage. To make informed decisions about your property taxes, you should first learn more about the tax and lien systems in your state. The following points are based off of information provided by the Texas Property Tax Lienholders Association.
Texas Property Tax System
Tax systems vary from state to state, so be sure to look up the specific guidelines of your state. Texas property taxes are about 2.5% of a property’s assessed value. Every January, tax liens are attached to properties for the following year’s taxes, and less than 5% of property taxes actually become delinquent, of which the TLT (Texas Lien Transfer) funds a small portion.
Where Do My Taxes Go?
Sometimes it feels like our taxes just fly out of wallets and disappear into thin air, so it’s beneficial to see how your taxes are being used. In Texas, property taxes are assessed, collected and used by local taxing entities to fund:
- schools
- roads
- hospitals
- fire departments
- other
What happens if I can’t pay my taxes?
Delinquent taxes can result in large penalties, interests and fees. If these are left unpaid, it could lead to foreclosure. This sounds daunting, but don’t stress! There is a solution: Tax Lien Transfers. The TLT model offers property owners affordable payments to take care of their tax penalties and avoid foreclosure.
Texas TLT Model Benefits
Property Owners
First and foremost, the TLT model keeps the property owner in control. It does this by:
- stopping the accumulation of interest rates and penalties
- assisting property owners who are facing temporary financial setbacks
- helping property owners avoid large lump-sum payments
- helping property owners avoid foreclosure
Taxing Units
The TLT model is also beneficial to taxing units. It collects revenue that would otherwise be delayed, which in turn creates more available funding for schools, roads, etc.
Mortgagee
The mortgagee (the bank or other party who is the lender in a mortgage) also stands to benefit from the TLT model. It preserves their equity by helping them to avoid foreclosure proceedings, which can cost the mortgagee quite a bit.
Why TLT is the Solution For You
There are many options for taking care of your delinquent tax charges, however, we believe Tax Lien Transfer is the best one. While other options, such as refinancing with mortgage or a county payment plan, exist, they are often more costly to the property owner than a TLT. Unlike these other options, TLTs require no down payment and have flexible term limits.
The Methods
The Texas TLT Model can follow two different methods: Taxpayer Lead Transfer or Government Lead Transfer. Both methods ultimately lead to your liens being released and help to keep you, the property owner, in control.
Hopefully this has helped you understand tax liens a little better, and made them seem a little less scary. With our help and the use of lien transfers, you can take back control in no time.
