What Happens If You Inherit a House With a Lien?
Inheritance is more or less a gift your loved one leaves you upon their passing. And while it would be nice just to assume that getting an inheritance such as a house would be the end of the story, it's not always the case.
Sometimes a deceased person may have left you a . But what happens if you inherit a house with a lien? The process becomes complicated, but it doesn't have to be if you have DoNotPay in your corner. DoNotPay has a Remove My Lien feature that lets you put this lien situation behind.
What Is a Lien Anyway?
A lien refers to a creditor's legal claim against a debtor's assets. The asset, in this case, a house, is used as collateral to satisfy the debt. For instance, if you took out a loan worth $250,000 to purchase property and failed to make payments as necessary, the creditor will place a lien on your home.
Having a lien on your home doesn't necessarily mean you'll be forced to sell the house to pay the debt. The lien is just a way for the creditor to cover themselves if the house is sold. So what happens if you on it and you want to sell?
You'd have essentially inherited the debt that came with the house. The lien will make it impossible for you to sell the house, as it shows on your public records. It will show the buyer that you don't have a clear title, meaning if they decide to buy it, they'll have purchased not only the house but its debt.
What Are the Types of Liens on a House?
The most common types of liens include:
|Judgment Liens||If you inherit a house with a lien, you can contest it in court. After a court hands down the verdict in a court case, the court enters the judgment. This ruling sets the results of the case, including the order for payment from one party to another.|
|Tax Liens||The IRS can place a tax lien for unpaid taxes such as local property taxes, granting them the right to seize your property and auction it off to recoup the payment.|
|Mechanic's Liens||A mechanic's lien comes about when you hire a contractor for their services but fail to pay them. The contractor then puts a lien on your property until you can pay them.|
|Real Estate Liens||A creditor can seize your property if you fail to satisfy your contractual obligations. Some property liens are placed automatically and with your consent, with the most common one being a mortgage.|
|Bank Liens||When you take out a loan to buy an asset, the bank will put a lien on the loan and subsequent property. As you buy the house, the seller will be paid using the loan, and the property will have a lien on it. If you fail to repay the loan, the bank will exercise the lien and seize the property.|
How To Remove a Lien?
You've inherited a house with a lien, so what next? There are several ways to get rid of the lien on your home, including:
- Paying the loan in full.
- Contesting the lien in court, arguing that it's an inheritance.
- Filing for bankruptcy.
- Renegotiating with the creditor personally.
- Waiting for the statute of limitations (usually five years) to run out.
Where Can I Find Lien Information?
If you suspect the house you inherited has a lien on it, it's time to be sure so that you can take the necessary steps to fix the issue. Liens are public records meaning you can access them for free anywhere at any time.
In many states, you can search for the lien information by address through the following authorities:
- County Recorder
- Assessor's Office
You may have to part with some money to obtain a hard copy of the report. The fee varies state by state.
Remove a Lien With DoNotPay
Inheriting a house with a lien on it is tricky since you may or may not have known that the home had a lien on it, to begin with. But you don't have to worry as DoNotPay is here to help. DoNotPay will gather all information pertaining to your lien inheritance situation and send the lienholder a letter requesting a renegotiation.
We can also help you fill out a Release of Lien form, send it to your creditor, and put you at ease so that you can get on with your life. Dealing with a lien isn't always straightforward, but DoNotPay ensures it is.
So here's what you need to do:
- Search for remove my lien on DoNotPay.
- Start our Remove My Lien product.
- Answer some questions about your specific lien and let us help you craft a letter to your creditor to resolve the issue.
And that's it. DoNotPay will send a letter to your creditor to resolve the problem.
DoNotPay Works Across All Groups
With DoNotPay, you no longer have to worry about what happens if you inherit a house with a lien and other similar issues. We can also help you:
- Sell a car with a lien
- Remove the state tax lien from the public record
- Determine if there is a lien against you
- What is a lien release on a car
- How to know if there’s a lien on my house
What Else Can DoNotPay Do?
Aside from helping you figure out what happens if you inherit a house with a lien, DoNotPay can also help you:
- Obtain a clean credit report
- File a release of liability form
- Reduce your property taxes
Join DoNotPay today to fie a lien release form and get the lien off your record in no time!