Another good technique is to make a show of good faith by making partial payments. Even a small, regular payment is better than nothing. By making regular payments, you’re indicating your intent to pay, despite current financial troubles that prevent you from paying the full amount. Try to pay $20, for example, out of every paycheck received. The tax collector will see that you’re trying to pay your pending bills and will be less likely to act against you.
TAX LIEN SALES
Tax collectors in 29 states, Washington, D.C., Puerto Rico, and the U.S. Virgin Islands use tax lien sales to force owners to pay unpaid property taxes. The process varies by state, but generally, when property owners default on their property taxes, tax collectors wait the period required by state law and then put those unpaid property taxes up for auction. The period varies from just a few months to several years. In Florida, if owners don’t pay taxes due in April, tax collectors will sell a lien June 1. In Indiana, a property will go to a tax sale in 15 months. In most states, the person willing to pay the most cash for the tax lien wins the auction. Some states, however, use a bid-down process in which investors’ bids indicate how much interest they will accept on their investment, with the lowest bidder winning. Whatever method is used, the tax collector takes the payment for the overdue taxes from the winning bid. In exchange, the purchaser gets a lien on the property. The winning bidder receives a return on their investment either through interest on the bid amount, or ownership of the property. If owners pay overdue taxes within the timeframe required by state law, they can redeem their property and the lien holder gets the investment capital back, plus the amount of interest allowed in the state. Tax lien investments usually have a statutory interest rate, typically between 10% and 12%. They can
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