If you are delinquent with your property taxes, you may feel like hiding behind the couch whenever there’s a knock on the door, thinking it could be the property tax collector. Fortunately, there are many things you can do, because the IRS understands how complex taxes actually are.
Steps to Take to Avoid Problems with the Property Tax Collector:
1. Be honest and direct. Make sure that you speak to them and ask them to help you create a payment plan. If you do not answer their correspondence, you will be seen as trying to avoid them, and the collector will take other steps to collect the money owed, including charging you with penalties and interest. Sometimes, this interest can be higher than that of a personal loan (if this is the case with you, then do take out a personal loan instead to pay your taxes off).
2. Speak to your mortgage company. It is possible to pay for taxes through an escrow if you have a mortgage on your home. This means that your monthly mortgage payments will go up, but that extra amount that you pay will mean that you won’t have a massive tax bill at the end of each year. The vast majority of mortgage companies would be happy to do this, because it is in their interest that you pay your taxes as well. They can even help if you are delinquent, ensuring that your escrow also includes a repayment of the missed taxes.
3. Make a gesture of goodwill by paying some amount to them, even if they have not yet agreed on any kind of repayment plan. Doing so shows them that you are willing to make things right and that you want to come to an amicable arrangement. Again, it is about showing that you are not avoiding paying what is owed.
It is quite rare for a property tax collector to ask for a lien to be placed on your property, so long as you follow the three steps above. If you don’t do that, however, then the IRS will propose a delinquent tax lien sale, which means your property may even be sold in order to repay the taxes that you owe. This is also why it is in the interest of the mortgage company to help you out, because having a property that they have mortgaged sold at a lien auction means that they are likely to lose out on a whole lot of money as well. In fact, delinquent taxes will be paid out of the sale balance before the mortgage will even be looked at, which means the mortgage company could find itself with nothing at all.
As scary as taxes may be, even the property tax collector understands that people sometimes have difficulties. Let them help you to come to some sort of arrangement that is mutually beneficial. That means you can stay in your home, while also making sure you don’t end up in any real financial difficulty due to your delinquency.