Involuntary Liens

Many of you are familiar with liens on your property that you are aware of, such as trust deeds. But, there are liens that can attach to your property that you may not be completely aware of. Some of these liens are judgement liens, Federal and State tax liens, mechanics’ liens

Judgement Lien: A general lien against all property of the debtor in the county where the abstract of judgement is recorded.

Federal and State Tax Liens: Liens for federal income tax are general liens and arise when the taxpayer refuses to pay a tax assessment. Liens for state taxes are general liens on all property within the state.

Mechanics’ Liens: Statutory liens by improvers of property for labor, material, and equipment.

Judgement Liens

Judgement liens can be terminated by an expiration of ten years (the statute of limitations would preclude any action for collection after that period), discharge of the debt in bankruptcy (debts based on fraud of debtor will not be discharged), and payment and satisfaction (when the debtor has paid, the judgement creditor must give a satisfaction of the judgement within 15 days of demand or be subject to a $100 penalty as well as actual damages).

Federal and State Tax Liens

Real property on which taxes are delinquent goes on the tax-defaulted property rolls after June 30, at which time a five-year redemption begins. If the property is not redeemed within the five-year period, the tax collector can sell the property to taxing agencies, revenue districts, certain nonprofit organizations, or anyone at public auction.

Mechanics’ Liens

Mechanics’ liens are lost if no action is taken to enforce them within 90 days of the filing. The failure to start action or to file a lien extinguishes only lien rights, not the debt. These liens can also be wiped out by a priority lien foreclosure. An owner can also get a mechanics’ lien released by filingĀ  a surety bond of 1 1/2 times the amount of the lien claimed. This is common when an amount due is in dispute.