Will bankruptcy stop the (property) tax sale of my home or other property?

by Jay Fleischman, Esq.

November 30, 2009

The simple answer is yes.   Filing bankruptcy will stop the sale of the property – if filed before the time of the sale and the taxing entity is notified of the bankruptcy filing.

If a person is substantially behind on his or her property taxes, he may want to file a Chapter 13 which gives the him up to five years to pay back the delinquent taxes; however, the person must be eligible to file Chapter 13.    If the amount can be paid pretty quickly – usually within 30 days, the person may be able to file a Chapter 7, provided the person qualifies to file a 7.

 In Texas, ad valorem taxes (real estate property taxes) are given an automatic priority and are given the the highest priority lien status allowed.  The taxes automatically become liens on January 1st of each year. 

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.

Last modified: November 30, 2009