Naples & Fort Myers Liens & Levies Attorney
Liens and levies are the different ways a creditor can collect an outstanding debt, but they are used differently.
What is the difference between a lien and a levy?
A lien and a levy differ on their effect on the property you own. When you do not pay taxes, a lien is a claim that is registered against your property. Once a lien has been filed, a levy will occur if the taxpayer does not satisfy the lien within a certain period. A levy is a seizure that will take a person’s property and give over ownership to the government. A levy is more aggressive than a lien.
What is a lien?
A lien is a public notification from the IRS in which they are telling you that you owe them money and that they have a legal claim against your property, which is used as collateral for the payment of the debt you owe. A lien is an aggressive step to collect a tax debt. Once a lien is in effect, it will be noted by major credit agencies and is a public notice that the IRS thinks you owe them money. One of the consequences of a lien against your property is that if you try to sell this property, the IRS will automatically take whatever it thinks you owe before you receive money from the sale of your property. It is best to avoid a lien before it happens to avoid the negative consequences once it’s in place.
What is a levy?
A levy means the IRS thinks you owe them money and they need to be aggressive in order to collect the tax debt from you. A levy gives the creditor the right to take your property to pay off the debt. A levy can be put on any of your assets including money and possessions that can be used to pay off the tax debt. In fact, your bank account could be frozen up to the amount of the levy for three weeks. You can challenge the levy, but if you fail, the money will be given to the IRS. If they cannot get funds through a bank account, it will garnish your wages, seize your home, or other possessions. At this point, it can be nearly impossible to get these assets or money back.
If you need help with a lien or a levy, contact Naples and Fort Myers IRS tax relief lawyer Todd D. Babbitt today for a free consultation.