It’s one of the scarier terms in the Internal Revenue Service’s lexicon: tax lien. If you owe taxes and haven’t been able to pay them, you may have one – or live in fear of one.

So what does it mean to have a tax lien attached to your property? Here’s what you need to know:

What is a tax lien? Simply put, it’s a document filed with the county government alerting the general public that you have an unpaid debt. If the property is sold, the government debt you owe will be paid and you’ll get the rest of the money.

The types of tax liens vary. You could have a federal tax lien on your house, but you could also have a state tax lien or a tax lien from your county or city. There‘s also the “super lien,” which involves being behind on homeowner association fees. And you aren’t alone if you have a tax lien: In fiscal year 2012, the IRS filed over 708,000 Notices of Federal Tax Liens.

How serious are tax liens? The answer you’ll get depends on whom you talk to and how much you owe. “In general, I would probably rather have an IRS tax lien on me than a state municipal one right now,” says Fred Croop, a certified personal accountant and dean of professional studies and social sciences at Misericordia University in Dallas, Pa. He hastens to add: “To be clear, I don’t have any [tax liens].”

That isn’t to say a federal tax lien isn’t serious. But the IRS, for all the fear it instills in taxpayers, is well known for working with those who owe a lot of back taxes. If you also owe taxes to a smaller government entity, such as your state or municipality, it can be an even bigger problem. In some states, as crazy as it sounds, people have lost homes for owing just a few hundred dollars in back county and city taxes. As a general rule, you should worry about paying back the smaller government debts first.

When it comes to state tax liens, “the specifics vary so much [from state to state] and are pretty fluid right now,” Croop says, adding that in Pennsylvania, where he lives, a new and much tougher property owner act went into effect in January. It used to be that a municipal lien in Pennsylvania attached to a person’s specific property – but now it attaches to any other property the person owns in the same county.

“What states and local governments will do to collect their moneys in these times of increasing budget shortfalls is very dynamic,” Croop says.

“It is extremely serious. You could lose your property,” says Rafael Castellanos, managing partner at Expert Title Insurance Agency LLC in New York City. But he is referring to a municipal tax lien. “If you don’t pay your property taxes, that’s deadly. You’re going to lose your house,” Castellanos says.

If you have a federal tax lien, in most cases, you have much more time to work things out, and the likelihood of keeping your house goes up considerably. But it is a financial inconvenience, to say the least. Your credit score will likely take a hit, possibly dropping as much as 100 points, according to a 2010 Congressional testimony by Nina Olson, who leads the Taxpayer Advocate Service, an independent organization within the IRS.

But if you ever get a tax levy, that’s another story. “A lien is simply a legal claim against the property. A levy is a legal seizure that actually takes the property to satisfy the tax debt,” says Sharon Lassar, certified public accountant and professor of accountancy at the University of Denver.

You don’t want a levy. “A lien on what you have is bad enough, but receiving later in the process a Notice of Intent to Levy and Notice of Your Right to a Hearing means you are now in deep – fill in your own word,” Croop says.

Even if your house isn’t taken, other assets could be, according to Lassar. “If a taxpayer refuses to pay an amount owed, her wages, bank account, other federal payments, house, car or other property may be levied,” she says.

Avoiding liens. Contact the number on the paperwork you receive informing you that you owe money to the government. You may be able to work out something better than you expect. For instance, sometimes the IRS will allow subordination, which lets other creditors like financial lenders take their debts before the IRS. This can make it easier to get a loan or mortgage. Sometimes the IRS will also allow an Offer in Compromise, which allows the taxpayer to satisfy the debt with a smaller amount.

“It only makes matters worse to ignore the notices,” Croop says. If you can work out an installment agreement with the IRS or your state or municipality to pay the back taxes slowly over time, you may even avoid a lien. And if you do get one, at least you’ll be making the debt smaller and getting out of the hole sooner.