The economy is in trouble which as a result turned many financial balance sheets to a downward spiral. Tax deed sales, tax lien auctions, bankruptcies, and foreclosures are getting common than ever before. Why are homeowners going down these paths? Here are some explanations:
Bankruptcy is a legal action by the government where a delinquent taxpayer is going to eliminate his tax debts. This usually happens after a job loss, divorce, or medical payment problem.
Tax deed sales are quite different in the case that it is not the bank that’s the holder of the bad debt but the government instead. The amount due is a percentage of the assessed value of the property and is paid annually. Payments do not only include taxes but insurance as well. If the homeowner fails to pay his tax debt, the government steps in to seize the property after the redemption period. The property is then put up for sale and sold to the highest bidder.
Tax lien sale is similar to tax deed. Homeowners who fail to pay their tax debt also lose their property to the government. The winning bidder at the auction gets the deed to the property free and clear.