Chapter 13 Treatment of County Real Estate Property Taxes for the Current Year
By Jonathan Ginsberg, Atlanta Bankruptcy Attorney on Oct 19, 2007 in Bankruptcy Practice and Procedure, Chapter 13 Bankruptcy, Georgia, Tax Issues
While most homeowners I see in my Atlanta area practice choose to escrow taxes and insurance, some choose to pay their property taxes directly to the county where they live. How do we handle the current year’s property tax obligations for these homeowners in Chapter 13?
In most Georgia counties, homeowners who pay their taxes directly receive a payment notice with two coupons - one due on September 1 and the second due on November 1. How much property tax do we include if the debtor files Chapter 13 prior to September 1? What about the homeowner who files between September 1 and November 1?
It turns out that under Georgia law, the county property taxes are payable on January 1 of a particular calendar year, while the county has the right to assign a collection date in September and/or November. So, when I file a Chapter 13 case where there is a direct property tax payment, I have to assume a property tax claim for the current year as well as any other prior year due.
My plan will also need to be set up as a step plan, since the debtor does not need to account for property taxes in his budget for the current year, but will need to account for these taxes in future years.
It is unclear to me whether the debtor can include a current property tax expense for purposes of the means test.
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