Lien in Arkansas headed to COSL tax lien sale???

[Chris Sayadian]

I currently have a lien on a property here in Hot Springs, Arkansas and received notice from COSL that the property was tax delinquent and slated for sale in July. I contacted COSL and was told my lien could be wiped away and I needed to contact an attorney. Any input from local investors as to what my best course of action would be to be able to maintain my lien or collect the debt?

[Davido Davido]

@Chris Sayadian, I'm not local and do not know Arkansas laws.  For what it's worth, in my State , Washington (and probably in every State), a lien holder  such as yourself, has the right to protect their lien by paying the past due taxes.  The amount you pay for the taxes, penalties and fees can then be added to your lien (together with 12% annual interest in WA).   That is a good return -if there is the probability that you can eventually collect it.  So the real question is whether your lien position in the property is worth protecting.   For example, if this is a $100,000 property with a $75,000 1st Mortgage, and a $15,000 Lien or 2nd mortgage ahead of you, then the property has $90,000 worth of debt that must be paid before your lien gets anything.  If there is only $10,000 in equity and it may not be worth adding thousands more to your lien.

Depending on the type of lien, your lien can either be foreclosed, or you can use your lien to file suit for a judgment that can be foreclosed.  Meaning that you can force the property to be sold at auction.  That strategy can be effective if there is significant equity in the property.  Also, if you did intend to foreclose, it can be even more effective to buy an assignment of any liens that are Junior to yours, at a steep discount.  Then at the Auction you would only need to pay the amount of the senior liens and you could add the full amount of your lien together with any junior liens to  your bid, so that you outbid potential competitors.  Best wishes.  Let us know what you decide.