Tax Lien Lawyers in Totowa

A "lien" in Totowa, New Jersey is a property right that a person or entity has in property owned by someone else, created by law, for the purpose of enforcing a debt. A lien gives its holder many rights in the property of another person, including the right to seize the proceeds of a sale of the property, and, if the debtor files for bankruptcy, the right to go to the front of the line among other creditors, making it more likely that the lien holder will collect something.

In Totowa, New Jersey, a "tax lien" is simply a lien imposed by the government to collect back taxes from a person or corporation, when other methods for collecting have failed.

Tax Liens in Totowa, New Jersey are generally only effective if the taxpayer has a significant amount of property on which a lien can be placed. However, it's critical to note that virtually any property, including that which is acquired after the lien is imposed, can be subject to a tax lien.

Tax Lien Procedure in Totowa, New Jersey

The actual process of setting up a Totowa, New Jersey tax lien is usually pretty simple. The agency responsible for collecting taxes must first determine that a tax lien is warranted, usually by finding that the debtor owes a significant amount of back taxes.

At this point, the taxpayer will receive a letter containing a "notice and demand," which, as the name suggests, gives notice that the recipient owes taxes, and demands immediate payment. It will usually give the taxpayer about 10 days to pay the demanded amount.

If this 10-day period expires without payment, the tax lien arises automatically. Once this happens, the tax authorities in New Jersey have all the rights in the taxpayer's property that any other lien holder would have, including priority over competing creditors.

But, under federal law, there are limits to how tax liens can be enforced in Totowa, New Jersey, and elsewhere. Generally, the IRS has 10 years to try and enforce a tax lien. If no effort is made to enforce a tax lien for 10 years, the lien is automatically lifted, and the lien holder loses all rights in it. This rule exists to ensure that the government collects its taxes in a reasonable time period, and it prevents valuable property (which could otherwise be contributing to the economy by being bought and sold) is not laded with a lien for an indefinite period of time.

How Can a Totowa, New Jersey Tax Lien Lawyer Help?

If you end up having a tax lien imposed on your property in New Jersey, you will probably have to deal with some fairly difficult legal issues, which might be confusing to a layperson.

Fortunately, Totowa, New Jersey tax attorneys can help. If you are facing the prospect of a tax lien, you should not hesitate to seek competent legal advice, to ensure that your legal rights are protected.