Foreclosure, Bankruptcy and property taxes

Last year I declared bankruptcy(due to a bad loan and lemon of a home) which is now discharged so the home is in foreclosure. I got notice of Trustee Sale coming the end of the month. Now, I just received notice that I still owe back property taxes which I obviously cant afford. I thought that the bankruptcy discharged this debt, was I wrong?? I dont know what to do about paying these taxes. Also, are there any other tax issues that are going to pop up?? I am in Sacramento COunty.

Edited: 06/26/2010 at 03:58AM

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Icon_minipost Sep 11 '07, 06:01 PM

The BK can only discharge the debts that were listed and which already existed.

I do not have the facts in your case. It could be a mistake or it could be that the property taxes were not included in the BK.

Lets assume you do not pay them. When you lose the property through foreclosure the property taxes will stay with the property.

The lender on the foreclosure might be able to come after you for any loss on the property. That judgment will happen after the foreclosure so it will be a debt that did not exist during the BK.

Did you use a lawyer when you went through the BK process? Did they advise you? Did you understand the advice? There could be an issue and maybe it would be best to ask them.

John Corey

Edited: 06/26/2010 at 03:58AM

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Icon_minipost Sep 12 '07, 12:38 AM

Thanks. Yes, I listed this debts in the bankruptcy but I am assuming that this debt is from last years property taxes that I didnt pay before I filed bankruptcy BUT I thought that all debtors listed had to discharge my debt. I know there are some exceptions like the darn utility companies but that has been taken care of.

Yes, I did use a lawyer and am very dissappointed in him. i cannot get a hold of him on this topic. I cant afford to hire another one. He has always been very hard to get a hold of, he didnt even show up for my reaffirmation hearing so I could keep my car. Thank goodness i was able to fend for myself with the judge. But I guess I should just go and show up at his office, maybe he will talk to me then.

Am I suppose to show up for the Trustee Sale?? I really prefer not too.

Thank you so much for your advice Mr.Corey. Mahalo!!

Edited: 06/26/2010 at 03:58AM

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Icon_minipost Sep 12 '07, 05:52 PM

Trustee sales work just fine if you are not there. They are designed to function without the owner.

You used Mahalo? You are not listing a location. Are you in HI?

I am no BK expert. Here is my understanding.

No debts that do not already exist could be wiped out. Hence a bill that comes in later (after the discharge) is likely to be valid.

No debt not listed will be discharged. The creditor was not given a chance to respond so their right to collect is still protected.

We are talking about property taxes. Technically you still own the property. hence you still could have property taxes building. That will happen until the day the title transfers. The property taxes will be unpaid and the bidder at the auction needs to pay them or take a risk that the property will be seized later to settle the taxes.

Be careful about what you do so that you do the right thing. If it is only property taxes then largely you will be OK.

As this is a trustee sale it is likely that the lender can not get a deficiency judgment (by definition a trustee sale precludes deficiency judgments in exchange for a faster process compared to a judicial action).

John Corey

Edited: 06/26/2010 at 03:59AM