Are property taxes discharged in Chap 7 filing? 25 Answers as of July 30, 2011

Will this be a debt that I'll end up paying or will the county put a lien on the house and be paid from the proceeds of the house once sold?

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Ray Fisher Law Offices
Ray Fisher Law Offices | Ray Fisher
Are property taxes discharged in Chap 7 filing? No. Will this be a debt that I'll end up paying or will the county put a lien on the house and be paid from the proceeds of the house once sold? That depends. If you sell the house, then any unpaid taxes will be paid at closing. If the house is foreclosed, at some point the mortgage company will sell it. Normally either the seller or the buyer will pay the taxes then. If it is foreclosed it is not likely you will ever have to pay the taxes.
Answer Applies to: Texas
Replied: 7/20/2011
The Schreiber Law Firm
The Schreiber Law Firm | Jeffrey D. Schreiber
Property taxes are not the personal obligation of the owner, so there is no personal liability to discharge. And, since the taxes are a lien on the property, a bankruptcy does not get rid of liens. The debt and the lien run with the land, so if not paid, after 5 years the county can sell the property for back taxes.
Answer Applies to: California
Replied: 7/20/2011
Law Office of Maureen O' Malley
Law Office of Maureen O' Malley | Maureen O'Malley
I've been told the tax people can foreclose, and my understanding is that foreclosures are conducted subject to property taxes.
Answer Applies to: Virginia
Replied: 7/19/2011
Bankruptcy Law office of Bill Rubendall
Bankruptcy Law office of Bill Rubendall | William M. Rubendall
Property taxes go with the property and need to be paid by the owner of the property. Bankruptcy will not discharged these taxes.
Answer Applies to: California
Replied: 7/19/2011
Ashman Law Office
Ashman Law Office | Glen Edward Ashman
Most taxes are not dischargeable in bankruptcy. Certainly your lawyer explained that when you filed?
Answer Applies to: Georgia
Replied: 7/19/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    Yes, real property taxes are secured to the home. If the home is going back to the bank then you do not have to pay them.
    Answer Applies to: California
    Replied: 7/18/2011
    Burnham & Associates
    Burnham & Associates | Stephanie K. Burnham
    Normally, property taxes are sought to be paid from the real estate itself. Legally, the real estate owes the taxes and since real estate can't pay, the owners pay the taxes in order to keep the property. This means that the Town will place a lien on the real estate, and eventually seek a tax sale if the taxes are not paid but usually do not come after the owner individually.
    Answer Applies to: New Hampshire
    Replied: 7/18/2011
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    If you are surrendering the home, you will not discharge them but the mortgage company will have to pay them out of the proceeds of selling your home. If you are not giving up your home, your county treasurer can foreclose on the house for non-payment of taxes after two-three years.
    Answer Applies to: Michigan
    Replied: 7/18/2011
    Engberg Law Office
    Engberg Law Office | Harry A. Engberg
    Property taxes will remain as a lien on the real estate.
    Answer Applies to: South Dakota
    Replied: 7/18/2011
    Law Office of J. Thomas Black, P.C.
    Law Office of J. Thomas Black, P.C. | J. Thomas Black
    Property taxes can be a dischargeable debt, if they were last payable without penalty more than a year prior to the filing of the bankruptcy. 11 U.S.C. Sec. 507(8)(B). However, here in Texas property taxes are a first lien that "primes" or comes before practically all other liens on real estate in Texas. Texas Tax Code, Sec. 32.05. Therefore if you don't pay it, the property tax authorities can sue you for foreclosure of the tax lien, and a state court can give them a judgment whereby they can sell the property at auction, and they are paid from the auction proceeds. If you have a mortgage on the property, the mortgage property will typically pay the taxes prior to the tax sale, and then seek reimbursement from you. Or, if you sell the property prior to a tax sale, the purchaser's title company would see that the taxes were paid out of the sale proceeds at the closing of the sale. If no title company is used to facilitate the property transaction, and the taxes aren't paid at the closing of the sale, the purchaser would take the property subject to the taxes.
    Answer Applies to: Texas
    Replied: 7/19/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    Usually property taxes are taken care of once property is sold.
    Answer Applies to: California
    Replied: 7/18/2011
    Financial Relief Law Center
    Financial Relief Law Center | Mark Alonso
    Property taxes aren't dischargeable unless they became due more than a year before you file for bankruptcy. That would have the effect of discharging your personal liability on the debt. However, even if you're able to discharge this in the bankruptcy because your property taxes meet this requirement, any lien placed on the property will not be removed and therefore unless you're letting the property go to foreclosure or otherwise surrendering it, the lien would have to be paid off before you can transfer the property.
    Answer Applies to: California
    Replied: 7/18/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    The County already has a lien against the property for the taxes and the taxes will have to be paid when the property is sold. The County can also sell the property at some point if the taxes are not paid (after 5 years in California). Property taxes are not dischargeable in Chapter 7 bankruptcy because they are a secured debt.
    Answer Applies to: California
    Replied: 7/18/2011
    Colorado Legal Solutions
    Colorado Legal Solutions | Stephen Harkess
    In Colorado, property taxes are assessed against the property. They are not collected against the owner personallly. The taxes will not be affected by a bankruptcy filing.
    Answer Applies to: Colorado
    Replied: 7/18/2011
    Tucker Legal Clinic
    Tucker Legal Clinic | Samuel Tucker
    No, certain income taxes can be discharged in many cases, but in general the tax sale process handles the delinquint property taxes outside of a bankruptcy. You may want to look into a Ch 13.
    Answer Applies to: Mississippi
    Replied: 7/18/2011
    Theodore N. Stapleton, PC
    Theodore N. Stapleton, PC | Theodore N. Stapleton
    Yes they are non-dischargeable and yes the taxes are a lien on the property and hopefully would be paid by the bank after foreclosure in order for them to market the property. I am happy to talk to you about your opotions. Please call to schedule a free consultation.
    Answer Applies to: Georgia
    Replied: 7/18/2011
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