Determining a loan applicant’s ability to repay a loan means considering many aspects of their financial situation. During pre-funding public records research, it is customary to look into things like credit reports and income tax returns. One thing that is often overlooked but that can throw a major wrench in the works, however, is a tax lien. Many times, taxpayers aren’t even aware that such liens exist, so they can’t voluntarily bring them to the lending company’s attention. Without performing such a tax lien search, then, you can easily overlook tax liens that could seriously jeopardize your ability to collect bad debt later.
Importance of a Tax Lien Search
It is crucial to properly and thoroughly assess an applicant’s ability to repay and their outstanding financial obligations to ensure that a given loan is suitable for them. Without ordering a tax lien search, you can easily miss something that could cause major problems later.
For one thing, tax liens are not voluntary. Many times, they are issued without the direct knowledge of the taxpayer. Sometimes, notifications about these liens are never received for whatever reason. Other times, taxpayers deliberately stick their heads in the sand because they don’t understand the implications. Either way, it is crucial to unearth tax liens if they exist to avoid serious complications in the future.
Further, since a tax lien can wreak serious havoc on a lender’s ability to collect on an old debt, it should be given high priority when stacked up against other types of liens. Make searching for tax liens a standard part of the process for best results.
How to Conduct an Effective Tax Lien Search
Finally, make sure that you know how to conduct an effective tax lien search. It is important to know how to order the report so that it includes the results that you need. Additionally, you must know how to assess and interpret the search results. Otherwise, you may mistake something innocuous for something problematic, or vice-versa, and that could cause even more headaches. When a tax lien search comes back clean, you can rest easy in the knowledge that an old lien won’t come back to haunt you.
Tax lien searches are standard protocol at Hudson Law and Ultratech Title so look no further. Visit our homepage today for more information!