Property taxes /Bankruptcy

[Indigoblue]

Jurisdiction

Pennsylvania

Trying to help a friend...

If I help him (finacially to file) file bankruptcy ,can property taxes be discharged, so as to avoid foreclosure by the state for unpaid taxes..... 3-4 years worth at app. 3000+ per year
And with the bankruptcy can credit card dept, and utility company (electric,gas..etc) be eliminated also...?
He has not worked in a couple of years, has no money...or assets to speak of....just what I help him out with...
Thanks

 

[army judge]

Trying to help a friend...

If I help him (finacially to file) file bankruptcy ,can property taxes be discharged, so as to avoid foreclosure by the state for unpaid taxes..... 3-4 years worth at app. 3000+ per year
And with the bankruptcy can credit card dept, and utility company (electric,gas..etc) be eliminated also...?
He has not worked in a couple of years, has no money...or assets to speak of....just what I help him out with...
Thanks

I suggest YOU help HIM out by hiring a lawyer to do his bankruptcy for HIM.

He can do a pro se bankruptcy, but i suggest you do nothing mor ethan type in what he wants if you persist in helping him.

If you do more, or if either one of you answers incorrectly when asked (and you will be asked), trouble can brew for both of you.

 

[oldIndigoblue]

I would just be picking up the lawyer tab....but my question was and is...can property taxes be discharged, so as to avoid foreclosure by the state for unpaid taxes..... 3-4 years worth at app. 3000+ per year
And with the bankruptcy can credit card dept, and utility company (electric,gas..etc) be eliminated also...?
Thanks

I suggest YOU help HIM out by hiring a lawyer to do his bankruptcy for HIM.

He can do a pro se bankruptcy, but i suggest you do nothing mor ethan type in what he wants if you persist in helping him.

If you do more, or if either one of you answers incorrectly when asked (and you will be asked), trouble can brew for both of you.

 

[Betty3]

Yes, re utility bills & credit cards. Generally you can discharge property taxes that were payable more than 1 yr. before the bankruptcy filing. All this needs to be discussed with a bankruptcy attorney.

 

[despritfreya]

Unfortunately Betty's comment is misleading. Property taxes run with the land. They are a lien on the land and, in most instances, are senior to even a first position mortgage. Further, in many states real estate taxes are not a personal obligation meaning the taxing authority is not going to sue for a money judgment, it will simply sell the tax roll and the purchaser, at some point, will foreclose upon the lien.

The "one year rule" deals with whether or not the tax is entitle to a "priority" as opposed to a "secured" claim status. 11 U.S.C 507 in part, provides as follow

(a) The following expenses and claims have priority in the following order:

(8) Eighth, allowed unsecured claims of governmental units, only to the extent that such claims are for -

(B) a property tax incurred before the commencement of the case and last payable without penalty after one year before the date of the filing of the petition.

This does not mean that property taxes that are more than a year old simply go away. The government is a secured creditor and must be treated as a secured creditor or it is going to take back its property. Liens pass through Chapter 7 unaffected. In either a Chapter 11, 12, or 13 they are provided for through the Plan of Reorganization.

OP, your friend needs to be discussing this with a bk attny.

Des.

 

[army judge]

Unfortunately Betty's comment is misleading. Property taxes run with the land. They are a lien on the land and, in most instances, are senior to even a first position mortgage. Further, in many states real estate taxes are not a personal obligation meaning the taxing authority is not going to sue for a money judgment, it will simply sell the tax roll and the purchaser, at some point, will foreclose upon the lien.

The "one year rule" deals with whether or not the tax is entitle to a "priority" as opposed to a "secured" claim status. 11 U.S.C 507 in part, provides as follow

(a) The following expenses and claims have priority in the following order:

(8) Eighth, allowed unsecured claims of governmental units, only to the extent that such claims are for -

(B) a property tax incurred before the commencement of the case and last payable without penalty after one year before the date of the filing of the petition.

This does not mean that property taxes that are more than a year old simply go away. The government is a secured creditor and must be treated as a secured creditor or it is going to take back its property. Liens pass through Chapter 7 unaffected. In either a Chapter 11, 12, or 13 they are provided for through the Plan of Reorganization.

OP, your friend needs to be discussing this with a bk attny.

Des.

Good to see you, counselor.

I've missed the wisdom you dispense, and very often would learn something as I read your informative posts.

I hope your health is stable, please don't be a stranger.

Your wisdom is needed by those struggling with troubling financial issues.

Those of us in our profession who chose to help people through the treacherous bankruptcy passage are truly doing work that makes a positive difference in the lives of their clients.