Can't pay Property Taxes due at the end of January

[Keebler]

So here we are approaching the end of 2007. I haven't paid unsecured debt for the last six months.

Money is tight but we're getting by. We haven't saved a penny for out attorney yet but we're current on all of our utilities and two vehicle payments.

(We recently crossed the $10,000 mark in payments we've made for medical expenses during 2007 and we owe half-again as much for medical bills we're making payments on.)

Our house was below 80% LTV when we bought it so we don't pay MIP or PMI or any of that garbage. We are required to pay Homeowner's Insurance directly and that's been paid. We're also required to pay the Property Taxes directly and that's going to be a problem. There's about $2,500 due next month that we have no cash available to pay!

So it's time for crisis management and I wanted to get any good advice you care to offer. The choices I see are as follows...

1) Don't pay the taxes and suffer the consequences of paying late. (Assuming we EVER accumulate the funds.)

2) Don't pay the taxes and try to bankrupt the amount we owe.

3) Sell an asset just before filing. I can almost certainly sell the truck at left for enough to cover the bill. It will leave us with only one working vehicle and it'll be no fun getting kids to school and me to work for the next several months. I don't think the trustee will go after the payment as preferential and it will probably be okay.

4) Charge the taxes on my only credit card that's not delinquent. I haven't charged a single thing in six months and I've got exactly ONE credit card still not delinquent. (At my credit union it's cross-colateralized with a vehicle loan. I've kept the vehicle current and the credit card current.) I'll probably NOT reaaffirm the vehicle loan there so everything I owe them will be included in the Bankruptcy.

5) Beg borrow or steal the money from a friend or relative.

6) Other ideas? (Prostitution is out of the question.)

[whatamess]

Id say the only option is to sell the second car. Weve done with one car and two children for two years. They ride the school bus like most other kids. Or wife can drop you off if she needs the car that day and pick you up later. If you can show the trustee that the asset was sold for taxes it will be okay id bet.
Its not fun, but we save tons of money on gas, insurance and maintaining a second car.
Someday when we can pay CASH we will buy car #2.
Other than that I have no idea what to tell you!! Any jewels? Photo equipment? Plasma Tvs to sell? (j/k)
Hope you can get through this!
WAM

[emoney]

In Dave Ramsey's Plan shelter is just after food on what to pay. So property taxes are very high on the list. Most taxing authorities will work out a monthly payment plan.
What does your written budget look like?
regards,
emoney

[Keebler]

I added another option I forgot about...

4) Charge the taxes on my only credit card that's not delinquent. I haven't charged a single thing in six months and I've got exactly ONE credit card still not delinquent. (At my credit union it's cross-colateralized with a vehicle loan. I've kept the vehicle current and the credit card current.) I'll probably NOT reaaffirm the vehicle loan there so everything I owe them will be included in the Bankruptcy.

In Dave Ramsey's Plan shelter is just after food on what to pay. So property taxes are very high on the list. Most taxing authorities will work out a monthly payment plan.
What does your written budget look like?
regards,
empney

I'm putting together a report based on the last six months and I'll post the results here when I'm done.

[erinmi]

In the city where we had our last house, they don't report or do anything about back taxes owed (other than a nominal interest charge) until it is 6 months past their due date. Once six months goes by, they turn it over to the county. The county will then pursue the matter.

I would call your local property tax authority and ask what you can do. Ours was willing to do a payment plan if we wanted to or they notated our account that we would pay in February after we received our income tax refund. They know that it isn't always easy to pay that amount all at once or that sometimes things come up that cause you to use your savings.

Good luck!

[Keebler]

In Dave Ramsey's Plan shelter is just after food on what to pay. So property taxes are very high on the list. Most taxing authorities will work out a monthly payment plan.
What does your written budget look like?
regards,
empney

Here's my monthly expenses from the last six months worth of data. A couple of adjustments were made for expenses that appeared inside the six-month window but aren't on-going.

- FAMILY OF FIVE -

Life Insurance                  $ 65.00 

Clothing                        $150.00 
Houshold Supplies               $ 35.00 
Laundry and Dry Cleaning        $  5.00 
Personal Grooming               $ 10.00 
Cable TV                        $ 70.00 

Household Financial Operations  $ 50.00 
Charitable Contributions        $  5.00 
Education                       $ 20.00 

Medical and Dental Expenses     $850.00 

Pet Expenses                    $ 70.00 
Recreation and Entertainment    $ 35.00 
Uncategorized Expenses          $ 50.00 

Payroll	Taxes                   $350.00 

Food                            $570.00 
	(Fast Food $105)
	(Groceries $465)		

Mortgage                        $450.00 
Property Insurance              $ 35.00 
Property Tax                    $200.00

Home Maintenance                $ 70.00 
Electricity and Heating Fuel    $220.00 
Telephone, Cell Phone and Inter $ 65.00 
Water and Sewer                 $ 65.00 

Transportation                  $370.00 
Automobile Insurance            $185.00 

Car Payment 1                   $375.00 
Car Payment 2                   $235.00 

Line of Credit                  $ 35.00 
Credit Card                     $120.00 
                             ===========
        TOTAL                   $4,760

        Gross Income            $4,250

[emoney]

I did not see anything for transportation, or did I overlook it. Can you reduce or eliminate the cable and fast food costs? A number of years ago the only meal my wife and Ihad outside of our home was a free meal at Dennys becasue it was my birthday. Food eaten out costs about 5 times what is costs to eat at home.
Talk to your doctors about your situation. You may have to pay only for current treatment and let past bill be paid over the time you need.

Remember your medical issues in the next election as medical needs in this country are not being met. We spend $7000/person for medical and yet 47 million do not have insurance and those that do may not have full coverage. We are paying for coverage as a country, but the distribution system is not meeting the needs of some persons.
regards,
emoney

[Keebler]

I did not see anything for transportation, or did I overlook it. Can you reduce or eliminate the cable and fast food costs? A number of years ago the only meal my wife and Ihad outside of our home was a free meal at Dennys becasue it was my birthday. Food eaten out costs about 5 times what is costs to eat at home.
Talk to your doctors about your situation. You may have to pay only for current treatment and let past bill be paid over the time you need.

Remember your medical issues in the next election as medical needs in this country are not being met. We spend $7000/person for medical and yet 47 million do not have insurance and those that do may not have full coverage. We are paying for coverage as a country, but the distribution system is not meeting the needs of some persons.
regards,
emoney

Transportation is shown...

Transportation: $370.00
Automobile Insurance: $185.00

Car Payment 1: $375.00
Car Payment 2: $235.00


The budget above is based on my actual expenses and not based on what we could do. The changes we need to make are clear but preparing for bankruptcy limits my choices. For example, I can't save money to pay for Property Taxes and then file in the middle of the year because the money in my savings account will be taken even though it is there for a specific purpose.


As far a the "Medical Crisis" in this country I do have an opinion that I'm not entirely willing to share. The bottom line is that everybody involved seems to have thier own perverted sense of what's right and wrong and none of the solutions for change are really much of a solution. When it comes to politics, my favorite saying is "None of us is a stupid as all of us."

[FreshLikeADaisy]

Keebler, add me to the list of people who think you should check into a payment plan on the taxes. Failing that, making a payment plan with the medical debts (which are also unsecured) in order to afford the taxes might be an option. The thing is, to me, property taxes are at the very tippy tippy top of the list: if you didn't pay them now, and then things got *worse*, you could stand to lose your home. I would far sooner skip the medical debt than the taxes.

Or the second car, for that matter: what good is paying your taxes if you go insane because your already complicated life just got complicated in triplicate because now, on top of everything else, you have to figure out who-where-when-if every where you try to go somewhere. It's like having six people in a one bathroom house (and being a girl too, so au naturel is not an easy option): it can be done, but daaaaaang...

No, I say keep the cars, pay the taxes, alter the medical if possible. Good luck!!!

[emoney]

If you have a saving account for property taxes and you file, pay property taxes before filing will probably take care of that.
Your BK attorney should guide you thru with proper planning so you get the full benfit of filing.
regards,
emoney

[Keebler]

Okay, here's what happened...

Penalties and fees get added starting February 1st and the law allows an additional 20% Collection Fee to be added in June. There's no provision for payments or anything unless I'm retired or disabled.

So I spent $1.75 and took out a Cash Advance against the one Credit Card I have that's not delinquent. (It's at a Credit Union along with a Vehicle Loan and an Overdraft Line of Credit.) I also spent $50 to defer my Vehicle Loan Payment for four months at the same Credit Union and I deferred my loan payments for two months on the other vehicle too.

In the end I don't expect to get off for free. I may or not make it 70 days past the advance and I may or may not be required to repay the amount of the advance. Even if I end up owing the entire Credit Card Balance I won't complain too much.

For 2008 I'm setting it up so I can pre-pay my taxes. Starting this month I'll make a payment for next year's taxes along with each house payment so I can be sure the money is set aside without actually holding it in my own account.

[FreshLikeADaisy]

FWIW, Keebler, I think your reasoning is sound, even though it may seem counterproductive to pay taxes with credit. You did it via cash advance instead of direct charge (very wise, because it won't set off alarms with the CC co *now* like a direct charge might) and even if you do have to pay it back like you said, you can make payment arrangements. As far as I can tell, you have basically converted secured, non-dischargeable debt to unsecured and potentially dischargeable debt.... very cool if it flies. I'm kind of surprised your property taxes aren't included in your mortgage payment via escrow, but you're doing the equivalent.

BTW, I went for 11 months not paying unsecured. I was judgement proof, but I understand your concern. Good luck!!!

[Keebler]

FWIW, Keebler, I think your reasoning is sound, even though it may seem counterproductive to pay taxes with credit. You did it via cash advance instead of direct charge (very wise, because it won't set off alarms with the CC co *now* like a direct charge might) and even if you do have to pay it back like you said, you can make payment arrangements. As far as I can tell, you have basically converted secured, non-dischargeable debt to unsecured and potentially dischargeable debt.... very cool if it flies. I'm kind of surprised your property taxes aren't included in your mortgage payment via escrow, but you're doing the equivalent.

BTW, I went for 11 months not paying unsecured. I was judgement proof, but I understand your concern. Good luck!!!

I used to think I was smart and I bought the house with less than 80% loan to value. (I despise MIP or PMI that gets added to mortgages along with all the other inspections and fees and crap.) The net result is a mortgage with nothing to pay except for principal and interest. I pay my Taxes directly myself along with my Property Insurance.

My house payment is unusually low but my Property Taxes amount to almost $200 a month.