Ch 7 & unpaid property taxes...

[reallynervous]

Our attorney instructed us not to pay our property taxes ($1700) for last year until we see where we come out on our appraisal. As I understood it, the unpaid taxes might be able to bring the value down a little if we are close to the homestead limit. We actually don't have the full amount of money we owe, but we could pay most of it right now but it will clear us out. We are waiting as he suggested, of course.

I was thinking today. I know that the taxes can't be discharged with the BK. Do you know if they must be paid before we can file BK7? I was wondering if we were to go on a payment plan for paying them, would that be allowed as an expense under the Schedule J form? We may be close on I vs J and I was thinking that perhaps it might help us to pay it via a payment plan if we could then count it as a monthly expense. That would also allow us to have a small cash reserve which we should easily be able to cover with our wildcard exemptions. It would be great to have it as an emergency fund.

I know I will need to ask our attorney, I just wanted to know if anyone had done anything similar, if it would be allowed, and if it would be worth asking about.

Thanks,
reallynervous

[SinkingFast]

I don't know if the unpaid taxes would have anything to do with your house valuation, but,.............. They would be considered a Priority Debt in BK.

Maybe that's where your attny was heading??!!

[reallynervous]

Thank you, SinkingFast! You are so kind to always share your knowledge with us. I really appreciate it.

As I understood him on the property value issue, if we ended up a little bit over, they could point out that the property taxes would need to be paid before any sale of the house could be made, so the value would be reduced by the amount of the taxes.

So, as a Priority Debt, then the payments we would make on that would be counted as expenses, correct? I think that is what you are saying and that may have been the greater intent of the attorney in telling us to hold off on paying them.

I hope that all works out. This not having any emergency fund it killing us. Yesterday we had to take to car to the garage again for another $270. I swear this car has cost us so much over the past few months. These are the times you really miss having a credit card. There went the gas money we had saved for our visit with my sister. I have to call & tell her tonight. Oh well, at least we had that gas money saved.

Thanks again for your time.
reallynervous