Tax Lien Lawyers in Litchfield
In Litchfield, Illinois, a "lien" is a type of property right, which is created by a court to acquire payment of a lawful debt. Typically, a valid lien gives its holder the right to seize the property subject to it, or at least some of the property's equity, to satisfy the debt. If the owner sells a piece of property that's subject to a lien, the creditor who owns the lien may be entitled to the proceeds, up to the amount you owe them. It can further put them "first in line" compared to other creditors, if the debtor files for bankruptcy.
A "tax lien" is simply a lien placed on a piece of property by the state or local government, to acquire the payment of back taxes. A tax lien in Litchfield, Illinois can arise to secure the payment of any federal or state tax, including income tax, estate tax, or gift tax.
However, a tax lien in Litchfield, Illinois will be ineffective if the debtor doesn't own any valuable property to encumber with a lien. As with any debt, the creditor can't collect if the debtor doesn't have any assets. Nonetheless, a tax lien can be applied to property that the taxpayer gains after the lien goes into effect.
Tax Lien Procedure in Litchfield, Illinois
Imposing a tax lien in Litchfield, Illinois is usually an uncomplicated process. Typically, the tax authorities simply have to make a decision that the taxpayer is delinquent in their taxes, and that imposing and enforcing a tax lien will actually be worth the effort.
They will then mail a document called a "notice and demand," which lets the taxpayer know that they owe money on their taxes, and that they have a specific period of time (normally 10 days) to pay what they owe.
If this 10-day period expires without payment, the tax lien arises automatically. Once this happens, the tax authorities in Illinois have all the options in the taxpayer's property that any other lien holder would have, containing priority over competing creditors.
Nonetheless, there are limits to how and when a tax lien can be enforced, at least under federal law. The IRS has 10 years to enforce a tax lien in Litchfield, Illinois or anywhere else in the U.S. If it never bothers to take action to seize property that's subject to a tax lien, the lien simply ceases to exist after 10 years. This rule is in place to ensure that the government does not sit on its rights, and to keep potentially-valuable property from being encumbered forever. Essentially, it creates a measure of certainty for both parties.
How Can a Litchfield, Illinois Tax Lien Lawyer Help?
If you are notified by the government that you owe back taxes in Illinois, and that they are going to pursue a tax lien to collect their money, things can get very difficult, extremely quickly.
Therefore, it's important that you retain a tax attorney in Litchfield, Illinois to ensure that whatever legal rights you have in this situation are defended. Your attorney will also be able to advise you on how to best deal with the situation.