Delaware State Tax Lien Checklist
A Delaware state tax lien is a legal claim the state places on your property when you owe unpaid state taxes. Delaware files this claim as a judgment through the county
Prothonotary's Office to establish its right to collect the debt. This enforcement action may impact your ability to sell or refinance real property and could prevent you from obtaining loans.
The state typically takes this step after attempting collection through notices and payment demands. Understanding what a Delaware state tax lien means and how the state processes it helps you respond appropriately and avoid further escalation of enforcement. Ignoring a Notice of Judgment can result in additional collection actions, including wage garnishment or bank levies.
What This Issue Means
A Delaware state tax lien means the state has filed a formal legal document, called a
Notice of Judgment, claiming a right to your property as security for unpaid state taxes.
The state files this judgment with the Prothonotary's Office in the county where the judgment is being recorded. The judgment does not mean the state has seized your property.
It means the state has publicly recorded its claim that it can take property or its value if the tax debt remains unpaid. Once filed, the judgment becomes a public record accessible through the county Recorder of Deeds Office. While the judgment does not appear on your credit report, it is accessible to creditors, lenders, and anyone searching public records for real estate transactions.
Why the State Issued This or Requires This
Delaware files a tax judgment when a taxpayer has an unpaid tax account and has failed to respond to earlier collection notices or payment demands. Before filing a Notice of Judgment, three requirements must generally be met: the Division of Revenue must assess the tax or the taxpayer must self-assess it by filing a return without paying; the
Division must send a Notice and Demand for payment; and the taxpayer must neglect or refuse to pay the tax or otherwise resolve the tax issue. The judgment is a formal debt collection tool that gives the state a legal claim to your assets.
Filing a judgment is part of Delaware's standard enforcement process, signaling that the state intends to pursue active collection. The state uses judgments to encourage payment and to secure its position if the taxpayer later sells property or refinances debt.
This process applies to delinquent tax accounts across New Castle County, Kent
County, and Sussex County.
What Happens If This Is Ignored
If a Delaware state tax lien remains unaddressed, the state may pursue additional collection actions beyond the judgment itself. The state can initiate wage garnishment, seizing a portion of your paycheck to pay the tax debt. Bank levies are another common next step, in which the state instructs your bank to freeze and transfer funds from your accounts to satisfy the tax debt.
The state may also file a lawsuit to foreclose on the judgment, forcing the sale of the property to pay the debt. In some cases involving real property, the state may pursue a
Sheriff Sale or similar enforcement action. Each of these actions escalates the enforcement process, increasing the cost and complexity of resolving the original tax
issue. Delaware has 10 years from the date the assessment becomes final to collect the debt, unless this period is extended by written agreement.
What This Does NOT Mean
A Delaware state tax lien does not mean the state has taken ownership of your property. It does not mean your wages or bank accounts have been frozen yet, though they may be in the future if collection continues. A judgment does not automatically result in property seizure or foreclosure.
You retain ownership and the right to use your property. A judgment also does not mean you have no options for resolution. Taxpayers can request payment plans, apply for penalty relief, or work with the state to settle the debt. The judgment does not appear on your credit report, though it remains a public record that lenders may find when searching county records or online property databases.
Checklist: What to Do After Receiving a Delaware State
Tax Lien Notice
Follow these steps to address a Delaware state tax lien
Step 1: Verify the debt
Locate and review the original tax notice or bill from the Delaware Division of Revenue.
Confirm the tax year, amount owed, and any penalties or interest added. Check your records to determine whether you filed a return for that tax year. Verify the amount is accurate based on your tax situation and review any Tax Account Delinquency information provided.
Step 2: Gather documentation
Collect all tax return copies, W-2s, 1099s, and payment receipts related to the tax years in question. Locate any correspondence from the state, including notices, bills, and judgment filing notices. Compile proof of any payments made after the original bill was issued, including receipts for payments made by cashier's check, money order, or other certified funds. Organize documentation by tax year and type.
Step 3: Contact the Delaware Division of Revenue
Call the Division of Revenue at (302) 577-8208 from New Castle County or out of
Delaware, or (800) 292-7826 from Kent County or Sussex County. Provide your taxpayer identification number and the tax years in question. Ask for a current account balance and an explanation of any amounts you do not recognize—request information about collection activities and the status of the judgment.
Step 4: Review the Notice of Judgment
Check whether the judgment notice specifically identifies the tax debt and amount.
Confirm the judgment filing date and the county where it was recorded with the
Prothonotary's Office. Request a copy of the filed judgment document from the county
Prothonotary's Office if you do not have one. This document becomes part of the public record and may be referenced in real estate transactions.
Step 5: Determine your payment options
Inquire whether the state offers payment plans to help with your balance. Inquire about installment agreements and whether you qualify based on the debt amount. Ask whether the state accepts lump-sum settlements that provide for less than the full
amount owed. Request details on how to apply for any payment plan option, including the accepted forms of payment.
Step 6: Ask about penalty abatement or relief
Request information about Delaware's penalty abatement process. Ask whether any penalties can be removed if you have reasonable cause for non-payment or late filing.
Determine whether your specific situation qualifies for relief under state policy. Ask for guidance on submitting a penalty abatement request to the Division of Revenue.
Step 7: Submit a formal written response if needed
If you dispute the debt or believe the judgment was filed in error, submit a written objection to the Division of Revenue. Include copies of supporting documentation and financial records that support your position. Send the letter via certified mail with a return receipt. Keep a copy for your records.
Step 8: Follow up on your request
If you applied for a payment plan or penalty relief, request written confirmation. Please inquire about the status of your request within 10 business days. Note any deadline provided for responding to the state's subsequent communication. Record the name and phone number of the agent handling your case for customer service reference purposes.
Step 9: Monitor the judgment status
After resolving the debt, request written confirmation that the judgment has been released. Ask when the judgment release will be recorded and sent to the county
Prothonotary's Office. Request a copy of the filed judgment release document, which will update the public record maintained by the Recorder of Deeds Office.
- Ignoring the judgment notice does not make it go away. Failing to respond to a
- Providing incomplete information when contacted delays resolution. The state
- Not requesting written confirmation leaves you vulnerable. Always ask for written
- Not checking for errors on the judgment document can cost you money. Review
- State enforcement notices and responses
- Sales tax audits, assessments, and collections
- Payroll & trust fund tax enforcement issues
- Penalty and interest reduction options
- Payment plans and state tax relief eligibility
- Representation before state tax agencies
Step 10: Request a payment plan confirmation letter
If you entered a payment plan, request written confirmation of the agreement terms.
Verify the monthly payment amount, due date, and total number of payments. Ask what happens if a payment is missed and whether the plan can be modified. Keep this letter with your tax and financial records.
What Happens After This Is Completed
After you contact the Division of Revenue and address the judgment issue, the state typically processes your request within a specified timeframe. If you enter a payment plan, the state will send you a written agreement outlining payment terms and dates.
The state will apply each payment first to current tax obligations and then to past-due amounts and interest.
If the full debt is paid, the Division of Revenue files a judgment release document with the county Prothonotary's Office, which removes the judgment from public records. The
Division will issue the release within 30 days after you satisfy the tax due by payment or adjustment. The judgment release becomes part of the public record at the
Prothonotary's Office and is updated in any online deeds database or property access systems.
Common Mistakes to Avoid
Notice of Judgment allows the state to pursue additional collection methods,
including potential Sheriff Sales of real property. Missing payment plan deadlines can result in the plan being cancelled and may lead to renewed enforcement action. may need specific details to verify your identity or debt. Failing to document communications creates problems later. Record the date, time, and name of every person you speak with at the Division of Revenue. confirmation of payment plans, penalty relief decisions, and judgment releases.
Do not rely on verbal agreements. Assuming the debt will disappear is a costly mistake. Delaware can pursue collection for 10 years from the date the assessment becomes final. the judgment filing for accuracy. If the amount, tax year, or identifying information is wrong, document the errors and notify the Division of Revenue immediately.
Frequently Asked Questions
Will a Delaware state tax lien prevent me from selling my house?
A tax judgment creates a claim against your real property. When you sell, the judgment must be paid from the sale proceeds before you receive any money. Some buyers will not purchase property with a judgment attached.
Can I remove the judgment myself?
No. The state removes a judgment only after the debt is paid, a payment plan is in place, or the state agrees to release it. You cannot remove a filed judgment on your own.
Does the judgment appear on my credit report?
No. Tax judgments do not appear on credit reports. The three major credit bureaus removed all tax liens and judgments from consumer credit reports in 2017 and 2018.
However, the judgment remains a public record that lenders may find when searching the county Prothonotary's Office records.
Does the judgment apply to all my property or just one piece?
A Delaware tax judgment typically applies to all real property you own in the state unless the judgment is filed against a specific property address. The judgment may also create a junior judgment status if other liens exist. Ask the state which properties are affected.
Can I negotiate the amount I owe?
Delaware may accept a settlement offer for less than the full balance in some cases.
Contact the Division of Revenue to ask whether your situation qualifies for settlement negotiations.
What if I cannot afford to pay the full amount?
The state offers installment payment plans for unpaid taxes. The payment amount and plan length depend on the total debt and your financial situation. Contact the Division of
Revenue to explore payment plan options.
Can the state garnish my wages if I have a judgment against me?
A judgment is separate from wage garnishment. The state can pursue both actions simultaneously as part of its debt collection process. A judgment gives the state a claim to property; wage garnishment seizes a portion of your paycheck.
What if I dispute the amount owed?
Submit a written objection to the Division of Revenue explaining why you believe the amount is incorrect. Include copies of supporting documents, such as tax returns or payment receipts showing the posting of payments.
How do I know if a judgment has been released?
Request written confirmation from the Division of Revenue. You can also contact the county Prothonotary's Office to check the public records for your property.
How long can Delaware collect the debt?
Delaware has 10 years from the date the assessment becomes final to collect tax debt through legal action. This period can be extended if you and the state agree in writing.
Facing State Tax Enforcement Action?
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