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Tax Liens and the Statute of Limitations

Forgiveness is said to be a virtue, and that as applied to debt, has followed the human race for thousands of years. From the wandering of the Israelites through the desert, and their entry into the Promise Land, every 7 years has been a sign of renewal and hope for those under the burden of financial debt. This practice survives to our present day law, and allows for a debt to be extinguished, in the absence any conflicting evidence.

The Law is Not So Harsh
Tax liens carry with them a statutory period of redemption, but also offer the delinquent tax payer further relief in that the lien is subject to the ancient Biblical premise of releasing the liability of an individual for debt after a period of time.

The Lord told Moses that He Himself had cancelled the debt, and after a period of 7 years, Israelites were not to pursue an outstanding debt from one of their own people. The Lord Himself declared that there would always be those that have less than others, but promised Israel financial prosperity if they followed this premise.

Accordingly, exactly as Moses himself conveyed in the land of Moab, Federal tax liens remain on an individual’s public record for a period of 7 years.

In practice, the fact that 7 years have passed does not absolve the debtor from repayment, but it does offer the debtor a legal defense. In the fullness of due process, only then, will the law treat a defense based on the expiry of the Statute of Limitations period, as worthy to declare the debtor free from the obligation to pay the debt. Without this curial declaration, the debtor is still obliged.
Occasionally, provisions allow for some public records to remain unaltered for 10 years. This is a separate matter to a person’s liability to repay a debt, and merely displays a creditor’s right to accept the bad debt, while insisting that it is still a matter of public record.

This is the definitive answer to someone desperately wanting to know how long do tax liens stay on credit reports.

In any event, State laws often differ from their Federal counterparts, and each State jurisdiction may have enacted a Statute of Limitations applicable to that jurisdiction.

Deeds Mean No Relief
The Statute of Limitations in a particular jurisdiction is able to be extended by deed, and this has to be determined to see if there is a statute of limitations on tax liens. A deed is a document executed with a particular solemnity and ritual, that the law is compelled to regard as an agreement that is irrevocably binding on both parties.When executing a deed, both parties sign the document in its unequivocal form, and in addition, engage the services of a witness who also signs the deed. Then, they undertake the further elaboration of registering the deed with a statutory authority specifically in existence for the registration of such deeds.

Thus, if a deed specifies that a debt is to survive the limitation period that would ordinarily be construed by a Court in the applicable jurisdiction, then the deed will dictate the path the Court will follow should there be any controversy.

Another indication that the Statute of Limitations has been extended is the Doctrine of Part Performance. This doctrine states that if a party to an agreement has performed part of their obligations, the Court will find that there exists an implication that an agreement has been made in accordance with this conduct. This is particularly the case when repayments to the loan have been made and the debtor denies that an agreement exists. Further, the Statute of Limitations runs from the commencement of an agreement, and so with each act of part performance in satisfying their obligations, or even the act of renegotiating and creating a subsequent agreement, the debtor actually recommences the running time for the Statute of Limitations.

Tax liens are instruments particular to the jurisdiction that governs their administration, and so the relevant legislation, and conditions attached to the lien may reveal if the lien is in the form of a deed which survives the ordinary limitation period. Also noteworthy is any subsequent agreement between the parties, which may reflect the existence of a separate and still actionable contract, as it may be one with where the limitation period has not yet expired.

If a person is wondering how long do tax liens stay on your credit, the above information needs to be gathered in order to be certain.

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