Tax Lien Foreclosure

Tax liens can be a great way to invest and make money. Understanding the process of foreclosing on a lien that has not been paid can eliminate a lot of stress and headaches. Knowing what to do and when to do it will help maximize your income from your tax lien investments.

Since half of the states are tax deed states and the other half are tax lien states, with Florida and Georgia as hybrids, let’s examine liens. Let’s look at the process of foreclosing on a lien.

We are going to go through the steps that are needed to collect on a tax lien that has not been paid in the redemption period. We are going to look at costs, court proceedings and auctions that lead up to us being paid as the tax certificate holder. By knowing what to do, you won’t have to worry about getting your money. Tax lien certificates are a great investment, and you should never lose money if you know what to do and when to do it. Let’s focus on the following three areas to understand the tax lien foreclosure process:

  1. Understanding the redemption period
  2. Working with the clerk of the court
  3. Understanding the auction process

When you buy a tax lien certificate, you will be given a redemption period. This is the amount of time that the owner of the property will have to pay you your principle and interest. This period is usually two to three years. If you are not paid, you can continue to collect interest or you can begin the foreclosure. After your redemption period, you can begin the foreclosure period any time you would like.

To begin the foreclosure process, you will need to contact the clerk of the court or the tax collector for the county where the property is located. The clerk will have the needed paperwork for you to file the foreclosure. There will be a fee charged, but you will receive that back when the foreclosure takes place.   Once the foreclosure is final, an auction date will be set.

At the auction, the starting bid will include everything that you are owed. All the monies you paid for the tax certificate, the interest you are owed, the fees you have paid and the court costs will all be used to determine the starting bid. If someone bids at least the starting bid, you will get your money. If the starting bid is not met then you will receive ownership of the property.

Foreclosing on a tax lien is simple. You do not need a lawyer, nor do you need to worry about costs.   Follow the steps and get the help you need from the clerk of the court. You should never lose money on liens. Take care of business and you will have reaped a very nice return of 12% to 18% from your tax liens.

Don’t let a lien foreclosure affect you. Follow up and it will pay.