Chapter 7 and Ad Valorem Taxes

[DonInOrlando]

I live in Florida and am planning a Chapter 7 filing, and have talked with two bankruptcy attorneys. I plan to give up my primary residence, on which I am delinquent one year of ad valorem tax. One lawyer tells me that the tax debt will be discharged in the bankruptcy, and the other tells me that in "most cases" it will not be discharged. Does anybody know which attorney is correct? Thanks!

[JoeBankrupt33]

If the property tax was last due, without penalty, one year or more before you file bankruptcy, then that is dischargeable. If there is a lien on your house because of the tax, then I'm not sure what happens.

[DonInOrlando]

Thanks, Joe. In this case, the tax was only due a few months ago. There is at this point no lien on the house. The reason I want to know is that if it is not dischargeable, I will sell something else that I am going to lose anyway to pay the tax now so that it won't continue to haunt me after the Chapter 7 is finished.

[StartingOver08]

If you are surrendering the house in BK, then the property taxes (ad valorem and non-ad valorem) get added to the amount owed as a lien on the house. You are not responsible for paying for the taxes when you are SURRENDERING the house in BK.

[DonInOrlando]

ok.... thanks. In this case, taxes are not escrowed, I pay them myself, but I assume that your answer will still apply. I DO plan to surrender the house, I realize that if I kept it then I would still owe the taxes.

[StartingOver08]

Does not matter if the taxes are escrowed or not - the lien attaches to the house. In order to deliver clear title to the eventual buyer of your property the lender has to pay that lien after you surrender and after the lender completes the foreclosure process