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 What Is the Difference Between a Lien and a Levy?

If you have or are planning to purchase at a tax sale or tax lien in the state of Maryland, then it’s important that you are familiar with the difference between a lien and a levy.

Having the right knowledge about these subjects that can often get a bit confusing will tremendously help in determining the steps you need to take moving forward, especially since procedures can get complicated fast in this area.

Thankfully, our Maryland tax lien attorneys are here to help you every step of the way. We’ve prepared this brief guide to clarify much-needed information.

What Is a Lien?

A lien is a legal right or claim on a property or assets made as security for the owner’s loan or collateral. It can either be executed by a legal judgment or a creditor. Essentially, it’s a guarantee that an obligation such as a loan will be repaid.

In an instance that the obligation is not satisfied, then said creditor has the right to seize the property in question.

If you’re looking to invest in or purchase a tax lien then we are happy to inform you that yes, there’s potential profit in this venture. But take note that many homeowners redeem their properties, so temper your expectations if you’re going in on this endeavor with the goal of owning a property in mind.

You can acquire a tax lien from annual tax sales held by local jurisdiction, which are held in auction format. Take note that there can be hidden costs and you also need to be wary of potential repair costs of the property upfront.

We highly advise that you also determine what property you want to buy a lien for, whether commercial, residential, property with improvements, or undeveloped lands and then pursue the purchase of that tax lien as you would any other investment.

What Is a Levy?

A levy is somewhat similar to a lien in that it’s imposed on a property or asset to collect a debt. Where does it differ from a lien? Imposing a levy is a more aggressive move to get a debt paid in that the property is legally seized in the process mostly to satisfy a tax debt.

Another huge difference you need to know about liens and levies is that it’s not possible to invest in or purchase the latter.

Once again, we strongly advise that if you are planning to purchase a tax lien that you do the required due diligence and research on your target property. There are risks, but with careful considerations and proper guidance, you will earn from such investments.

Maryland Tax Lien Attorney

Seems a bit overwhelming? It can be. That’s why you need help from the best Maryland tax sale attorney for additional assistance and expert advice. The law office of LewisMcDaniels is always happy to share with you their decades of experience when it comes to tax sales or tax lien endeavors. Don’t hesitate to call us today!

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