Almost year ago, I wrote about this issue. Homeowners in Illinois who don’t pay real estate taxes on time are given a certain amount of time to pay the taxes. If, at the end of the year, they don’t pay their real estate taxes, the County holds a Tax Sale. Then, tax buyers may pay the county the taxes. Then, the county gets the money, and the tax buyer gets interest. But here is where it gets tricky. The homeowner is allowed 2 years after the sale to redeem the taxes and keep his house. But, if the homeowner doesn’t pay the taxes, the tax buyer can file a tax deed and take the house.
Well, if the homeowner files for bankruptcy during the process, the bankruptcy Automatic Stay puts a halt to this process. First, if you file a Chapter 13 case before the sale, you, the homeowner, can pay the taxes over time in the Chapter 13 plan. Now, the 7th Circuit US Court of Appeals, in the Lamont case, 13-1187, ruled that a homeowner can file a Chapter 13 case and pay the taxes, after the tax sale, and extend the 2-year redemption period.
This is a very important decision, because, before this decision, some Bankruptcy Courts in Illinois allowed homeowners to pay their sold taxes in Chapter 13 and some did not. Now all Bankruptcy Courts in Illinois must follow the 7th Circuit, and the uncertainty is eliminated. The decision shows that you need to pay attention to your real estate taxes, and when you file a bankruptcy case is very important!
Here’s the link to my previous article explaining the issue: http://www.bankruptcylawchicago.com/real-estate-taxes-and-bankruptcy-in-illinois-recent-court-decisions-may-help-homeowners/
Everyone’s case is unique, so if you have a real estate tax issue you need help with, call right away to see what rights you have. The clock is ticking. Call us with your property tax questions. We will let you know your options, and what we can do to help you save your home.
Daniel J. Winter
BankruptcyLawChicago.com
312-789-9999
Offices in Chicago, Gurnee, Oak Lawn, and Skokie, Illinois.
