Competition of Tax Liens

Tax liens are placed on properties in instances where an individual owes money and has either chosen to not pay the balance, or has not been able to pay it. These tax liens are used as a means by which a creditor can encourage or force the individual to pay the debt exhibited by the tax liens, through one method or another. Sometimes, when a person owes a great deal of money to a variety of different sources, there can be a competition of tax liens.

A competition of tax liens in the United States often involves individual establishments in competition with the Federal government, but it can be between two lines of private creditors. When the federal government imposes tax liens, they are known as federal tax liens. The competition of tax liens can be eradicated in very simple ways.

There are a number of cases in which the competition of tax liens is settled with priority being given to whichever creditor established the tax liens first. When involved with federal tax liens, this is not always the case. Many times, priority is given to the individual creditors as opposed to the Federal government.

Additionally, in the competition of tax liens, those tax liens which are put in place by the state government also receive priority over federal tax liens, no matter when the tax liens were filed. In many states, individual state tax liens do not even need to be filed or recorded. They will still have priority when it comes to the competition of tax liens involving the Federal government.

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