First Corporate Solutions is launching a 3-part blog series on tax lien searching! This week’s post discusses why you should be searching for tax liens. Here is a schedule for upcoming topics on tax lien searching:
Friday 10/22: Ordering a Tax Lien Search
Tips on how to order your tax lien search to achieve the best results.
Friday 10/29: Reviewing Tax Lien Search Results
Expert advice on how to review and interpret your tax lien search results.
When performing pre-funding public records research to help determine an applicant’s outstanding obligations and gauge their ability to repay debts, it is important to include a search for existing tax liens. Tax lien searches are recommended for a couple of reasons:
1. Tax liens are a factor in determining the priority of claims. Just like a UCC Financing Statement, a tax lien has priority relative to other liens, based on its date of filing. An existing tax lien could jeopardize a lender’s ability to collect on a bad debt.
2. Tax liens are involuntary in nature so a taxpayer may not even be aware they have a lien filed against them. In these cases, a tax lien search may be the only way to find out about a lien before advancing funds.
You will need to have an understanding of how to order the search to get the desired results and how to review the search results once returned from your vendor. Check back each Friday this month for more tips and tricks on tax lien searching!