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.
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