Can bankruptcy ever discharge local property taxes owed to a Town on a primary residence? Does the stay govern issues regarding unpaid local property tax, a taking for back taxes, or a lien against the real property? Is it proper to list unpaid local taxes as a debt or the Town as a creditor when filing? Mortgage current. Massachusetts.
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Hi willdufauve,
Usually, and in MA we might need to use that term loosely, property taxes attach to the property as a tax lien. The Town becomes a creditor and the debt gets listed on schedule D, secured claims. Property taxes survive the BK as a lien on the property.
Once you file, the Town/State/IRS should all stop any tax collection efforts. For any taxes not discharged, after discharge the collection can begin where it left off.
If you plan to stay in your home, have a plan to get your property taxes caught up. Eventually the Town/State/IRS will want to foreclose and sell to recover the back taxes.
If you are going to let the house go, let the property taxes go with it, good riddance.
A disclaimer is needed here....I am not a real estate bankruptcy lawyer be any stretch of the imagination, and Mass has more...shall we say "peculiar" laws than most states. Need to get a local legal opinion to be sure on anything.
Tom in ColoCh7 filed 5/12/2010.....341 meeting 6/30/2010....report of no distribution 8/15/2010.....discharged 10/01/2010.....closed 11/09/2010
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