Your home is your family's biggest investment. You want to protect that investment with proper money management. Sometimes, however, bills either slip through the cracks or unforeseen circumstances arise. If a bill goes unpaid, a lien -- or a legal claim on someone's property -- can be placed on your house to ensure future payment. It is in your best interest to either avoid having the lien placed on your house in the first place or to pay it in full as quickly as possible.
Pay all of your bills on time. Check your credit at least once a year to ensure that no liens have been placed on your home without your knowledge. Also, before you make a large purchase or refinance your home, check your credit. A lien will prevent refinancing. If you are trying to sell your home, you will not be able to sell it until all liens are paid in full and cleaned from the title of your home.
If you have been threatened with a lien on your property and you have paid your bills on time, be sure to contact your local magistrate court to object to the lien being filed. If necessary, you may have to hire an attorney to prevent the lien from going through. Provide proof of payment and any copies of contracts or invoices that you had with the individual filing the lien. If you have not paid the bill, contact the company that is trying to place the lien on your property and see if you can pay the bill in full or through a payment plan to prevent the lien.
If you are having work done on your home, make sure to hire a reputable contractor who pays his bills on time. If you fail to pay your contractor, or your contractor fails to pay his subcontractors, the only recourse that they have to gather payment is to put a lien on your home. To avoid this situation, have a lien waiver written up from the general contractor, every material supplier and every subcontractor who works on a project. Also, obtain labor waivers from any person who supplies labor to the project. This may be cumbersome, but it protects you and your home in the long run. These waivers should be submitted with each invoice, and you should refuse to pay without receipt of these waivers.
Pay your tax bills on time. If you have not paid your taxes or are behind in filing your taxes, the IRS can file a lien against your property for the taxes it assumes you owe (in the event of not filing) and the late fees associated with your lien. The IRS will give you a 30-day notice prior to filing the lien. During this time period, you must contact the IRS office and either arrange a payment plan, file your return or request a hearing. If you feel that you are being required to pay taxes that are not your debt, you need to discuss your case with an attorney to see if you can avoid paying the higher taxes.
Keep a filing system that shows how and when all bills that you receive have been paid. Keep copies of canceled checks and receipts as proof of payment. If you wish to fight a bill, do so in a timely manner (within 30 days of receipt) to avoid the situation of having a lien placed upon your property.
If you check your credit and find a miscellaneous lien attached to your property, you must immediately begin the process of trying to have that lien removed. If you have to hire an attorney to get to the bottom of the problem, it could be months before you have the lien removed. If you are in a hurry to refinance or sell a house, you will not be able to until a lien is cleared in full.