What Is a Non-Tax Lien?

Like a tax lien, a non-tax lien is a legal restriction placed upon the title to your home that prevents you from benefiting from a clear title until you pay off the amount that you owe. Non-tax liens are a legal debt collection method only in certain states.

How Non-Tax Liens Work

When you owe a debt that a private creditor cannot recover from you, that creditor has the option to file a civil lawsuit against you. If the creditor wins the lawsuit, the court will then award it a judgment. Once the creditor becomes a judgment creditor, it has the legal right to force you to pay the debt involuntarily. The options available to judgment creditors in most states are to seek a wage garnishment, bank levy or property lien.

Non-Tax Liens and Your Credit

Although tax liens appear on your credit report, non-tax liens rarely do. The bad debt and the judgment leading up to the non-tax lien, however, almost certainly will appear on your credit report and significantly damage your credit score. The Fair Credit Reporting Act dictates the time frame any negative item can appear on your credit report. Both bad debts and judgments cannot remain within your credit file for any longer than seven years.

Time Frame for a Non-Tax Lien

Each state has guidelines regulating how long a property lien may remain in effect. While some liens will expire after a few years, other states allow creditors to renew liens repeatedly until the debtor pays what he owes. Most states, however, do not permit property liens to remain in effect for longer than twenty years.


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