Judgments and Tax Liens
A tax lien is an involuntary charge placed against your property due to the non-payment of taxes owed. A judgment is a judicial decree issued by the court that specifies the amount of money you owe to a creditor. Under the Fair Credit Reporting Act, negative account items generally remain on a credit report for up to seven years. This applies to judgments and paid tax liens; however, exceptions do exist. In California, unpaid tax liens remain on your report for up to 10 years but indefinitely in all other states. Also in New York, paid judgments can only remain on the report for up to five years.
Your Rights on Judgments and Tax Liens
If you have a tax lien or judgment that has passed the applicable statute of limitations under the Fair Credit Reporting Act, the law gives you the right to dispute that item. You can file a dispute online at the bureau’s website. You can also file a dispute by mail or phone using the bureau’s contact information located on their website or on your credit report. The FCRA gives the bureau up to 30 days to investigate your dispute and remove the items.
Deleted Judgments & Tax Liens does not get you off the hook
Even if a judgment is removed from your credit report, if it is unpaid, you are still responsible for the payment of that debt. The statute of limitations for the judgment to appear on your report is seven years; however, each state has its own statute of limitations on how long you’re legally responsible for payment of that judgment, which determines how long the owner of that judgment can come after you for payment. In Florida, the statute of limitations for judgments is 20 years from the date the court issued it. Also, the issuer of an unpaid tax lien can still pursue payment from you even if the lien no longer appears on your credit report.
Beware of Credit Repair Companies
According to the Federal Trade Commission, watch out for credit repair companies that promise to remove derogatory items from your credit report, including tax liens and judgments. This could be a scam. Bureaus are only required to remove erroneous, inaccurate or outdated information from your report; they are not obligated to remove accurate data from the report, even if it is negative. The Fair Credit Reporting Act gives you the right to correct errors on your report yourself for free.