October 26th, 2007 by Questions
HI there…..I was wondering what happens in the case that when a person files for bankruptcy and they are behind in their property taxes.
October 29, 2007 at 8:55 am, A licensed trustee said:
Nothing – property taxes are a secured debt that ranks in priority against your home. In layman’s terms that means the debt survives your bankruptcy and must be repaid in full.
A few words of caution about property taxes:
– if/when you fall 3 years behind in your property taxes the municipality in which you live has the right to seize and sell your property to pay the arrears.
– Further, if you start to repay the debt, your payments are applied to the newest detb first – to avoid the 3 year problem you need to repay the entire debt.
– and finally, if your mortgage company discovers you are behind in your property taxes they may pay them out and then assess you a penalty and interest.
Don’t let this problem go unchecked – talk to someone and sort it out before you house is at risk.
Log in to Reply
Please post a follow up comment below:
(Note: comments are reviewed by moderators and then posted after approval. In addition, due to high volume some of the comments might not be posted.)
You must be logged in to post a comment.