What Springfield Homeowners Need to Know
If you’ve fallen behind on property taxes, you may have heard terms like tax liens and tax deeds. While both can put your home at risk, they work differently and have different consequences. Understanding the difference between these two processes can help you make the right decisions to protect your home and finances.
In this blog, we’ll break down what tax liens and tax deeds are, how they impact homeowners in Springfield, MO, and what you can do if you’re facing tax-related issues.
What is a Tax Lien?
A tax lien is a legal claim placed on your property by the local government due to unpaid property taxes. This lien acts as a security interest, ensuring that the government gets paid before you can sell or refinance your home.
Key Points About Tax Liens:
- A tax lien does not immediately result in losing your home.
- It prevents you from selling or refinancing until the debt is paid.
- The lien may be sold to investors, who can earn interest until you pay off the debt.
- If unpaid for too long, it could lead to foreclosure.
What is a Tax Deed?
A tax deed means that the government has seized your property and is selling it to recover unpaid taxes. This happens after a tax lien remains unpaid for an extended period.
Key Points About Tax Deeds:
- A tax deed sale results in losing ownership of your home.
- The government auctions your home to the highest bidder.
- In some cases, you may have a right to redemption (a period to reclaim your home by paying off the debt).
- Once the property is sold, you may have little or no legal recourse to get it back.
How Does This Work in Missouri?
In Missouri, the process primarily follows a tax lien system. Here’s how it works in Springfield, MO:
- When you fail to pay property taxes, a tax lien is placed on your home.
- The lien is sold at a tax lien auction where investors can bid on it.
- The homeowner has a redemption period (typically 1-3 years but in Missouri it is 1 year) to pay back the debt and reclaim the property.
- If the homeowner does not pay within the redemption period, the lienholder may begin foreclosure proceedings.
What Can You Do if You Have a Tax Lien?
If you have a tax lien on your home, you still have options to protect your property:
- Pay Off the Debt – The quickest way to remove a lien is to pay the past-due taxes in full.
- Set Up a Payment Plan – Many counties offer installment payment options to help homeowners catch up.
- Challenge the Lien – If you believe there was an error, you can dispute the lien with local tax authorities.
- Sell Your Home Before Foreclosure – Selling to a cash buyer can help you avoid foreclosure and clear your debt.
- Seek Legal Assistance – An attorney can help you explore your legal rights and potential solutions.
How to Avoid Future Tax Liens
- Set Up Automatic Tax Payments to ensure your taxes are always paid on time.
- Apply for Tax Exemptions if you qualify for senior, disability, or other exemptions.
- Stay Informed on Local Tax Laws to understand deadlines and penalties in Springfield, MO.
Conclusion
Understanding the difference between tax liens and tax deeds is crucial for protecting your home. While a tax lien doesn’t mean immediate loss of property, failure to act can lead to a tax deed sale, resulting in losing your home.
If you’re facing a tax lien or struggling to keep up with payments, taking action now can make all the difference.
Call to Action:
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