Paying property taxes and utilities

I stopped paying my mortage this february.(CA primary residence) Since i had always paid my property taxes on my own and have not included it with my mortgage( stupid thing to do now that i have decided to foreclose), i wonder what to do when property tax is due April 10(for half yearly payments) and again Dec 10th(by which I would have moved out of the house.

I also intend of filing Chapter 7 sometime this year, perhaps in July. What will happen if I dont pay property tax starting from April 2009?

I will continue to live here till July or august this year. After I move out, will I still have to pay utilities, water, sewer , gargage , gas etc and property tax while it is going thru the foreclosure process? In CA, that can take 6 months up to a year from what I had read here.

Please advise .I am already low on cash (unemployed) and am trying to conerve as much cash as possible. Thank you for your much needed input.

If you are surrendering the house, you don't need to do anything. The foreclosing lender will ultimately have to get taxes caught up. Just be sure to list the State Taxing Authority as a creditor and also list separately the claim your mortgage lender would have against you for unpaid property tax.

HHM,
If you already filled and had a chp 7 discharged and the house says IIB and you decide to walk away then the taxes will still be the responsibility of the lender correct?

HHM,
If you already filled and had a chp 7 discharged and the house says IIB and you decide to walk away then the taxes will still be the responsibility of the lender correct?Property taxes are always the responsibility of the person who holds title to the property.

Now I am confused. I haven't filed Chapter 7 yet, will have to do that in 5 mths time, due to a variety of reasons.Meanwhile, taxes are due april 10th. If I don't pay, can i do as HHM said and declare that when filing Chapter 7? Will the unpaid taxes be dischargeable under Chapter 7 since I am going "insolvent"?

If I have a lien from water and garbage /uitilities against my house, will that have to be listed too when filing? Is that dischargeable too?

All of those things will need to be listed. The property taxes are statutory and attach to the home. They will not be "discharged" because taxes are never dischargeable! (Very limited circumstances they are, but let's not even go there.)

On the water, trash, sewage liens... these may be statutory liens as well. Underlying State non-bankruptcy law will apply to those. Once a lien attaches to property, it is generally owed by the person that is listed on the deed. However, some liens are strange in that they are really personal debt, but the property just secures the debt until it is paid.

Bottom line.

If you give up your home in a Chapter 7 (or Chapter 13), the property taxes will still be attached to the property. When the Bank gets title to the home through the foreclosure process, the Bank will pay the taxes. You will not owe the taxes once the home is titled (deeded) to the Bank or the purchaser, whoever that may be.

As for the other statutory liens (water, trash, etc), it will depend on non-bankruptcy law. I think they are probably dischargeable up to the petition date. Anything post-petition (after you file) is your responsibility!

Thank you all for your input.

I suppose I dont have to pay property taxes while I am also not paying the mortgage while undergoing the foreclosure process. While reading HHM's post about Tax liablities, I guess I would have to list the property tax unpaid and also file some kind of motion to "squash" the lien since it is linked to the house.Am I right?

I also have a second equity line of credit. I read somewhere that even if Citicorp sends me a 1099 I am not liable for paying taxes on that, if I declare insolvency under Chapter 7. Am I right?

I will continue to pay the utilities especially water and garbage (CA) since there is a lien on that.Once i vacate the house (it will be before i file) i will call and stop the utilities.

Thank you all for your input.

I suppose I dont have to pay property taxes while I am also not paying the mortgage while undergoing the foreclosure process. While reading HHM's post about Tax liablities, I guess I would have to list the property tax unpaid and also file some kind of motion to "squash" the lien since it is linked to the house.Am I right?

I also have a second equity line of credit. I read somewhere that even if Citicorp sends me a 1099 I am not liable for paying taxes on that, if I declare insolvency under Chapter 7. Am I right?

I will continue to pay the utilities especially water and garbage (CA) since there is a lien on that.Once i vacate the house (it will be before i file) i will call and stop the utilities.You need to do nothing, if you're surrendering the property. You can not "quash" or avoid a lien (generally) on property, unless it was improperly recorded or recorded after filing. :)

Shoot I never paid my property taxes last year!
Haven't heard a thing.
My lender told me if I didn't pay home owners insurance it was ok because they carry their own coverage.

Hoping I will never had to file BK, since in our state they can't collect the deficiency after the home sells at auction.

Hey Justbroke,

You need to do nothing, if you're surrendering the property. You can not "quash" or avoid a lien (generally) on property, unless it was improperly recorded or recorded after filing.

Forgive me for sounding like a newbie cos i am :blush2: So in other words, are you saying that even if i have a lien in not paying property tax, not paying my utilities for the house and then foreclose upon it , when the BK gets discharged and closed, then the liens associated with the house for Ch 7 would be discharged too? (insolvency clause)I am afraid liens especially with state tax (prop tax) would still haunt me after the Ch 7 has been closed. Can that happen??:(

How do i make sure it is properly recorded after filing??

Your personally responsibility as to the underlying mortgage debt is discharged. The lien is never discharged, so don't worry about the lien. Just worry about the debt. Your mortgage will go away, the Bank will take possession of the house (or proceed through some process to foreclose and either sell the property or take control).

As for your utilities... anything prior to filing will be discharged. Anything after the date your filed, are your responsibility and won't be discharged.

I did not pay my property taxes due in Dec and will not pay the 2nd part due in April either. As previously stated, the new title owner (bank) will be responsible for any back taxes.

Regarding utilities, I am paying all utilities until I am told to vacate the home after foreclosure. Don't want the utility company to switch off any utilities while I live here rent free for the next few months.

Also still paying home insurance as I was told I am still liable while I own home if anything happens to anyone on the property.

If you are NOT going to keep the house, then none of this matters. When the primary mortgage holder forecloses, that legally quashes all liens. IF YOU ARE SURRENDERING YOUR HOUSE, you don't have to do anything regarding property taxes. With utilities, they will need to be listed as creditors because in many states, there is personal responsibility for unpaid utilities.

Thanks for all your answers! Appreciate that!

Mine expires this August and since Feb was the first month I stopped paying the mortgage, the process may well extend beyond August. If it does, should I pay month by month (rather than a whole year) By August, I would be moving OUT of the house for sure, should I still maintain home insurance ? It would cost me more money, what did the rest of you do? I am tempted to just not renew.

I know a poster here did maintain insurance( when did you stop paying?)

It is a risk that someone may break into the house and damage it while I am moved out, but I am trying to weigh the risks ,since my neighborhood has little or no foreclosures and is regarded as "safe", even though lots of burglaries happen in other areas. What do you think???

Flood insurance (CA) also expired in Dec 2009.I will not renew that one for sure, it is expensive.

Hello,

This subject matter brings up a question. Georgia forecloses pretty quick once the lender starts the foreclosure process. I don't want to wait until the last hour to move out since I have a different home to go to.

I see no reason why I can't cancel the water and electric when I'm ready to move. I pay it every month on time so there is no outstanding balance problem. I don't have to keep them going ... is that right?

May seem like a silly question, but I don't want to assume anything.

Thanks.

You have no problem in canceling the power. As to the water, it may be different. Here (FL) we are charged for the water and sewer whether it is on or not. There is a min monthly charge. It is charged to whoever owns the property. If it is not paid, then a lien is placed on the property and whoever goes to turn on the water has to pay all the past due charges before water can be turned on again.

I did not pay my property taxes due in Dec and will not pay the 2nd part due in April either. As previously stated, the new title owner (bank) will be responsible for any back taxes.

Regarding utilities, I am paying all utilities until I am told to vacate the home after foreclosure. Don't want the utility company to switch off any utilities while I live here rent free for the next few months.

Also still paying home insurance as I was told I am still liable while I own home if anything happens to anyone on the property.

You stopped paying prop tazes in Dec, doghouse.......When did the foreclosure process start for you? Have you filed BK or do you intend to?

I am in a similar situation because - Missed mortgage in March...no letter yet (just lots of phone calls) and Id like to live here rent free as long as possible to save $#..PROBLEM IS - I cant save too much $ before filing BK cuz then trustee will take it all, right?!? SO -

If I need to wait at least until June to file BK (having baby in MAy, want med bills to be IIBK), how much more time after June could I really wait to file???

I mean, should I file sooner rather than later so that I can start saving the money from mortgage pmt for future?

OR should I file later so I dont speed up the foreclosure process>????

I am in NV and am current on all other CC payments, car pmts, etc..thinking about missing one CC pmt htis month (BUT I STILL HAVE TOO MUCH MONEY LEFT OVER FROM MISSING ALL THESE PMTS) WHat to do?

I NEED any help I can get because I want to time the BK to my benefit, so I can live in the house for free as long as possible...HELP PLEASE!

Thanks for all your answers! Appreciate that!



I know a poster here did maintain insurance( when did you stop paying?)

It is a

Flood insurance (CA) also expired in Dec 2009.I will not renew that one for sure, it is expensive.

I maintained insurance on the home up to the date of the sherriff's sale and cancelled the policy. Even after the sale didn't happen when it was supposed to, the lender place insurance on their own, knowing full well I stopped insurance based on their sale date that THEY said was going to occur.

As for flood, I don't think it's required, therefore you should be free to cancel that and get a refund.
Af for utilities, I paid them, simply because I wanted the good reference for my next utility company so I didn't have to pay the deposit.

You stopped paying prop tazes in Dec, doghouse.......When did the foreclosure process start for you? Have you filed BK or do you intend to?

I am in a similar situation because - Missed mortgage in March...no letter yet (just lots of phone calls) and Id like to live here rent free as long as possible to save $#..PROBLEM IS - I cant save too much $ before filing BK cuz then trustee will take it all, right?!? SO -

If I need to wait at least until June to file BK (having baby in MAy, want med bills to be IIBK), how much more time after June could I really wait to file???

I mean, should I file sooner rather than later so that I can start saving the money from mortgage pmt for future?

OR should I file later so I dont speed up the foreclosure process>????

I am in NV and am current on all other CC payments, car pmts, etc..thinking about missing one CC pmt htis month (BUT I STILL HAVE TOO MUCH MONEY LEFT OVER FROM MISSING ALL THESE PMTS) WHat to do?

I NEED any help I can get because I want to time the BK to my benefit, so I can live in the house for free as long as possible...HELP PLEASE!

AfraidofBK, I last paid my mortgage in Sept '08. I am going into month 7 and no NOD yet from 1st or 2nd lender. HELOC lender filed a NOD but I just ignored it. They are 3rd in line as a junior lien holder.

The foreclosure process has not started. I have not filed for BK yet but plan on doing so by middle of April. I don't know if filing will accelerate the foreclosure process from the 1st mortgage lender or not. Even if they send a NOD today and start foreclosure after the 90 day wait, I expect to live in the place at least another 3 to 4 months or longer. Essentially hope to live rent free at least till Sept/Oct which will put me at 11 months to a year.

BTW, I am in Northern Calif. And when I file, I will have 21K Calif. wildcard exemption to protect about 11K in the bank that I will have.

Forgive my ignorance, but whats a heloc lender?
Here in NV we only have 1000 per spouse for wildcard for a total of 2k but my lawyer keeps saying - dont use that for your bank acct, keep it in case something comes up...but then if I try to drain my bank acct (spend it down) and I could have used it for that all along, I will miss my 2k, u know? Id rather have $ to live off of after the BK than now.

HELOC is a Home Equity Line of Credit. This was one of those credit products that helped destroy the housing market. :) Banks basically gave many folks $100K credit lines (including lines against a credit card!) that allowed people to use the rapid equity increase in their property as a line of credit (check or credit card).

The other type is a home equity loan. The home equity loan is a one time thing, where the HELOC is a revolving line of credit.

I think the cancelling insurance on the property before foreclosure might vary for each state. When I called USAA about getting renters insurance for the apartment we are now renting they asked about our homeowners insurance. I explained that we had filed bankruptcy and were waiting on the mortgage company to foreclose. They said until the property was no longer ours we could not cancel the insurance anyway (not that I even asked them to.). They said that once it was sold we would have to either get a statement from the mortgage company or the mortgage company's attorney stating that we no longer had ties to the property. Of course, I realize maybe the guy I was speaking to could have been mistaken. I'm in Ohio.