Paying property taxes and utilities

[Proxy]

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.

[HHM]

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.

[monkatom]

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?

[justbroke]

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.

[Proxy]

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?

[justbroke]

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!

[Proxy]

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.

[justbroke]

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.

[breezyday]

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.

[Proxy]

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 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??

[justbroke]

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.

[Doghouse]

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.

[HHM]

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.

[Proxy]

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.

[questionsGA]

Another question - can I cancel utilities?

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.