When you owe an individual or a business a substantial sum of money, how can you be sure of the repayment of the amount? The answer to this question is a tax lien that carries some guarantee of the amount being returned. To put it in simple terms, a tax lien acts as a legal guarantee for an individual lender or an organization for it refrains the debtor from transferring the title of his or her property so that it can be used as collateral to arrange for finances.

Tax liens are mostly imposed on real estate properties and the most common form of it is a mortgage lien. A lien may be imposed on personal property for different reasons. These include:

• For the sake of mortgages
• For paying a tax debt
• For paying for construction supplies or labor services offered

Each of the states in the country has its own share of rules pertaining to the issue of tax liens.  In the state of Maryland, for example, a tax lien is filed in the circuit court of the resident county. This legal filing informs other creditors about the claims that have been made against the assets that you own and can well be treated as priority over your other debts. If such an account is not settled at the earliest, such a lien may affect your credit rating to a large extent.

In Maryland, the tax lien certificate rates vary from one county to another and the interest rate ranges from 6% – 24%. The redemption period for Maryland tax liens may also vary between a span of six months to a couple of years. Also each of the counties has their own set of rules that govern the redemption period, sales and interest rates. The tax lien auctions take place through a competitive bidding process.

Not everyone is familiar with such technical terms as tax liens and therefore you can refer to a legal directory to access additional information.