1.) Does a person have any recourse whatsoever when a lien is imposed by a state?

2.) How long does a tax lien stay on someones credit history?

3.) What is the negative impact of a tax lien, is it as bad or worse
than a bankruptcy?

4.) Would it be impossible to obtain a loan or credit with a tax lien
on ones credit?

5.) Upon paying all moneys associated with a lien, would the negative
effects be lessened, and would automatic credit rate scoring like FICO
reflect the change if the lien remained but all payments were
satisfied?

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Request for Question Clarification by hummer-ga on 02 Mar 2006 11:06 PST

Hi veryworried, 

Which state?  

Regards, hummer

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Clarification of Question by veryworried-ga on 02 Mar 2006 11:25 PST

The state is Maryland.

1)  State tax liens are very difficult to contest. If you weren't
properly served the legal papers this could be one way to contest the
issue.

2)  The Fair Credit Reporting Act limits the length of time a negative
item can remain on a credit report to seven years, however Tax Liens
are a whole different ball game and if unpaid they can remain on your
report for 7 years after being paid or undefinitely if unpaid.

3)  I would say a tax lien is probably worse than a bankruptcy because
after a bankruptcy you can start rebuilding your credit.  With an
unpaid tax lien it's going to be difficult to rebuild your credit
because no creditors will give you a chance.

4)  I would say it's going to be virtually impossible to get a
mortgage with an unpaid tax lien.  Just about every mortgage company
will require the debt to be paid before loaning you money for a
mortgage.  You might be able to get a credit card with some of the
sub-prime lenders like First Premier Bank.

5)  After you pay a lien it will be on your report for 7 years but as
time passes its effects on your credit score will lessen and lessen
and your score will continue to rise.  Eventually it will fall off
your report and not have any effect.  If it remains unpaid it will
have a long standing negative effect on your score.