Property Tax Issues
Property Taxes on your real property are assessed on January 1 of each year but are not due until October of that year and will be considered late (and subject to interest) if not paid by February 1 of the following year. If your home is escrowed for taxes, then your mortgage company will pay your property taxes out of your mortgage payment If you are delinquent on your mortgage this may cause you to have an escrow deficiency which will need to be caught up for your mortgage to be current. If it is not kept current, your mortgage company may foreclose.
If you do not have an escrow account on your homestead or other real property, you must pay your taxes directly to the taxing authorities on time. If you do not, your mortgage company may pay your taxes, count that as a default and put you into an escrow account. Failure to pay your taxes if you are not escrowed may be considered a default by the mortgage company, enabling it to set you for foreclosure.
A taxing authority may also sue you and set you for foreclosure if you are delinquent on your property taxes, even if you do not have a mortgage. If you are delinquent on your property taxes, consult a bankruptcy attorney as soon as possible. You may be able to reorganize the debt, so it is important to consult an attorney, especially before taking out loans to pay your taxes as those loans often have very high interest rates. Property tax loans may also be reorganized in Chapter 13.
Chapter 13 is a very effective tool in catching up on delinquent property taxes. If you qualify, Chapter 13 will allow you time to come current on your property taxes and stop a foreclosure.
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