Bank Paid Taxes!

[justbroke]

They are so lucky, as they would be in violation of the Plan and several other rules.

Anyhow the Bank paid my taxes on my North Carolina property. Yes, this was pre-petition taxes. I just got my Form 1098 and it clearly shows that they paid it and charged it to my escrow account (leaving a negative escrow balance).

Luckily, I'm now surrendering that property, but they had paid it even before that. Even though my Plan specifically stated that they were restrained from paying any pre-petition taxes.

For Chapter 13 debtors, be careful if they do this. What will happen is that your escrow account will get really strange and you'll end up with a very high monthly payment to account for the payment and the new escrow shortage and the "catchup" in the escrow account. This is specifically why there are provisions in my plan for them to not pay pre-petition taxes!

It's all moot for me... but it makes me mad that they ignored the provisions.

[NowImDownInIt]

That would make me mad too, good thing you are surrendering the property.

[filingin08]

What happens when you have a negative escrow and the bank is asking for more than the typical monthly payment? We don't escrow our taxes, so now the bank is asking for $300+ more a month for 2007 taxes. I'm really confused. I thought/hoped this would be included in the arreages. Can it? Am I making sense?

[justbroke]

What happens when you have a negative escrow and the bank is asking for more than the typical monthly payment? We don't escrow our taxes, so now the bank is asking for $300+ more a month for 2007 taxes. I'm really confused. I thought/hoped this would be included in the arreages. Can it? Am I making sense?

It's not part of the arrearages.

However, your plan should have stated that the lenders are restrained from paying any pre-petition taxes. Otherwise, they'll pay them and really mess up the escrow account!

[deadbroke99]

It's not part of the arrearages.

However, your plan should have stated that the lenders are restrained from paying any pre-petition taxes. Otherwise, they'll pay them and really mess up the escrow account!

If you surrender the property and the taxes are paid, does the county refund you that money?

[justbroke]

If you surrender the property and the taxes are paid, does the county refund you that money?

Now THAT would be funny.

Alas, even if they did, the Trustee would go after it for sure. I don't see any governmental agency handing over money that easily.

Would probably have to do some sort of preferential transfer motion to the court and fight it out. Waste of time.