Burton, a Baltimore resident, refused to pay a $1,037.42 water bill because he thought it was higher than it should have been, the actor told ABC News. Baltimore officials filed a lien against his property over the unpaid bill and sold it to a private company called LienLogic. Now the company is demanding repayment, plus $2,000 in legal fees on top of 18 percent interest.
Burton faces foreclosure if he doesn't pay up.
"You have no choice but to pay or you lose your home -- that can't be right," Burton told ABC.
His situation, unfortunately, isn't uncommon. More and more companies have found a lucrative business in snapping up tax liens against properties and charging exorbitant interest rates on the debt. LienLogic ballooned from a $1 million venture in 2009 to a multimillion-dollar company investing $49 million in more than 900 properties by 2010, according to the Colorado Springs Business Journal.
There are now 33 counties in the country selling tax liens to third parties, Business Insider noted, under what some consider to be antiquated state laws. If the debtor doesn't pay back the original debt, plus interest and transaction fees, the third party can foreclose on the debtor. And according to The Associated Press, these private companies can purchase tax liens on a $200,000 home for only $1,200.
It's happened plenty of times.
According to ABC News, an elderly woman in Rhode Island lost her home when a company purchased a lien on her property for an unpaid $474 sewer bill. The company then sold her house for $85,000.
This summer, AOL Real Estate reported on an Atlanta woman who nearly lost her home over an unpaid tax bill that wasn't even hers. Earlier this year, a New Jersey plumber was in danger of foreclosure after he failed to pay a $140 sewer bill. He ended up rolling the bill -- which spiked to $50,000 after interest -- into his mortgage, so he was able to keep his home.
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