Property Taxes and Bankruptcy

March 5th, 2010 by Reed Allmand

Rental Property and Bankruptcy

Many debtors behind on both their mortgage and property taxes wonder if bankruptcy can be used to stop a property tax sale of their home.  Fortunately for debtors facing a property tax sale of their home, bankruptcy can be used to stop the sale if they move quickly. Here’s what you need to do:

  1. Before filing for bankruptcy, find out if there is a property tax lien on your home. In the state of Texas, ad valorem taxes are given the highest priority of all liens and if property taxes are owed, by January 1st of each year, a lien will be placed against the home.
  2. Find out how much you owe on your property taxes before you file bankruptcy.  Are you able to pay cash for this amount to have the lien removed?  If it is a small amount and you need the lien removed because you are trying to sell the property you may want to consider paying off the lien immediately.  However, you may not want to do this if you are considering filing Chapter 7 or Chapter 13 bankruptcy soon.  Speak with your bankruptcy attorney before you pay off the property tax lien to find out how it might impact your bankruptcy case.
  3. Work with your bankruptcy attorney to determine which type of bankruptcy is a good fit for your financial circumstances.  If you file a Chapter 13 bankruptcy you will have an opportunity to pay off your lien over a 3 to 5 year period. However, the lien will not be removed from your records until it is fully paid.  If you decide to file Chapter 7 bankruptcy and the lien is paid off fairly quickly then you will receive the benefit of having the lien immediately removed from your records.

avatar

About Reed Allmand

Website

Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."

View all posts by Reed Allmand

Subscribe

Subscribe to our e-mail newsletter to receive updates.

FAQ

Why do I need to submit a new wage order when I modify my plan

When we modify your bankruptcy plan we are changing your plan payments. This means that we have to get with your employer and change the terms and amount of your wage order. The only way we can do that is by filling out a new wage order form.  

Learn More
What happens if the stay terminates on my home?

If the bankruptcy stay terminates on your home that means that even though your in bankruptcy, your creditor can pursue all there legal remedies they can pursue if you were not in bankruptcy. This includes foreclosure, and having your house sold and evicting you from your house.

Learn More

Find Location

map
  • Dallas Bankruptcy

    5646 Milton Street, Ste. 120 Dallas, Texas 75206
  • Fort Worth Bankruptcy

    860 Airport Freeway, Suite 401, Hurst, Texas 76054
  • More Locations

Meet Our Clients