Hello, I need a little information on liens that are placed on your house for back taxes. Unemployed as of Nov '01 I filed BK7 in Jan '03 and was discharged in June. During this time I did not pay my personal property taxes city/county/school about $3k/yr. I also cashed in my 401(k) to live on I just now found a job in my field making enough money to live on although at $20k/yr less that what I was making. I have about $3k of the 401(k) funds left in the bank I am driving my father's 10 yr old pickup truck (I used to drive new Mercedes) and It probably will be another year before I buy my own reasonably priced vehicle that I will need to keep for many years. In addition to the regular debts that I have (house, utilities, insurance) that I can take car of out of the money I now make I have: 1. Past due property taxes for '02 and '03 2. '04 property taxes are just around the corner - another $3k 3. '03 income taxes due April 15th '04 for the funds taken out of the 401(k) - I have yet to estimate what they might be so this may not be too big of an issue considering I've had very little income and I have the house interest as a deduction. I also need to consider the possible benefits of the possible deductions if I pay some of the real estate taxes. I only have limited funds and I will not be able to get both caught up as soon as they may like. If everyone would let me alone to pay as much as I can until it is paid off I probably could get caught up by end of '04 (this assumes paying the '04 property taxes also) Which one will cause me more grief if I don't pay quickly? Liens: What happens when they put a lien on your house? How does this affect your credit, unpaid and after it is paid. Please do not tell me the BK7 is already doing the most damage - I know that. In light of the BK7, is avoiding a lien on your credit report, even after its been paid, worth much effort. My attorney doesn't seem to think having a lien put on your house and then paying it off is such a big deal. Taxes: What happens on 4/15 when you cannot pay all of the taxes due? Does this affect your credit? Again, unpaid and satisfied? Is it worth the effort to avoid over the grief from a lien? Which one is the worst? I have tried to research this on the but I've not been able to find information. Can anyone direct me to more information concerning these issues.
Depending on where you live, state can get medieval on your a$$. Pay them first! The IRS is pretty friendly and after being taken out behind the woodshed a coupla years ago in congressional hearings, they've been reigned in quite a bit through reforms. You can always make nice with them at some later date. I did want to offer an anecdote as an aside. Sounds as if you may have dined at the dot-com trough at your old job if you were driving around in a new Benz. I too was part of that frothy era and made a small fortune selling a pair of companies back then. I too drive a Mercedes - but it's 18 years old with 172k miles on it - paid $4k cash for it pre-dot-com boom. I have many friends who live(d) beyond their means, and I watch them regularly go through the same thing you're going through now. I live in a town where every single resident is well-heeled. But just yesterday I stood behind a woman in line at Target who had 5 credit cards and a check declined trying to buy sod to landscape her Mc-mansion, before she peeled away in a brand new 500S. I see this all the time. Whenever I can, I try to convey to people what I see everyday, because I know most have a wild misconception about so-called wealthy people and their lifestyles. Most are so cash poor they can't rub two nickels together. It's mostly smoke-and-mirrors. Genuine financial security comes from fiscal responsibility. Not luck or lottery. Instead of sporting around in an H2, I choose to spend my days watching the Wiggles with my one year old son, with a new baby on the way, while never having to worry about job or money. The way I got here (and more importantly, the way I plan to STAY here), is through living well beneath my means, avoiding big-ticket purchases like the plague, and resisting the urge to keep up with the Joneses. I also personally askew carrying credit card debt since I feel ccards are the largest form of legalized loan sharking in the country today, but that's just mho. Good luck with your journey to get on your feet again. I've been there and understand intimately that it ain't no picnic. But don't forget to learn from your mistakes so you never have to repeat them.
Thanks for the reply. I too think like you in many ways. The time off and an ailing father has brought home what is important and what is not. Twice in my life I have spent a lifetime's worth of money and it won't happen again. Post BK7 I am closer to being out of debt than I have been for many years and I am happier than I have been in many years. Mike
