What is our obligation for back property taxes after a bankruptcy?

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What is our obligation for back property taxes after a bankruptcy?

We filed a Chapter 13 bankruptcy in 09/06 and were discharged (all claims paid) in 06/09. Our property tax bill was sold in 12/06 and the trustee mailed a check for these taxes to the courthouse prior to the bill being sold. However the check was returned to the trustee from the courthouse. This became one of the claims within our bankruptcy. How can this have been legal when we had already filed for Chapter 13 almost 3 months previously? The mentioned tax bill was from several years back and was overlooked in 2 different title searches. We have resided at this address for 28 years.

Asked on May 3, 2011 under Bankruptcy Law, Kentucky

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Two different issues:

1) Does a bankruptcy discharge tax claims? Generally no. Several different types of claims or debts are specifically exempted from being discharged in bankruptcy, and taxes are one of the main types. I believe that property tax claims are one of the type of tax claims not discharged. So filing for Chapter 13 does not impact your obligation to pay.

2) Is it a valid tax bill, and has it been brought within the time period (a/k/a statute of limitations) to enforce it? That depends on the facts. If you were not aware of it previously, it's not impossible it's in error; and if it is old enough, it *may* be too long to enforce. You should consult with an attorney experienced in property taxes, bringing all documentation, etc. with you.

Note that a title search would find--or should find--a tax lien on the home; but if a lien has not been placed, it's not clear it would find delinquent taxes.


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