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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2543
Experience:  Better Business Bur 15yrs bankruptcy experience. Chicago Bar
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Can you please point me to any case law that shows I can get

Customer Question

Can you please point me to any case law that shows I can get a property tax lien removed from my house if I file BK using 522f and 545 as long as I can show that I was insolvent when the lien was placed, thanks!
Submitted: 2 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 2 years ago.

Terry L. :

Hi, thanks for your question. You should hire a lawyer for specific legal advice. No attorney client relationship is created here.

Terry L. :

To use this section, you need to prove the following:

Terry L. :

1. The value of the home - usually an appraisal.

Terry L. :

2. the exemption allowed in the bankruptcy case -homestead to exempt equity.

Terry L. :

3. List of liens recorded against the title to the property. (usually the mortgage statement from 1st, 2nd, equity line etc)

Terry L. :

4. Show the judgment lien and the amount of the judgment lien.

Terry L. :

Then, you need to do the math: Value minus loans, minus exemption.

Terry L. :

IF the lien impairs the exemption, meaning there is no other equity for it to attach to, then the court will strip it under 522F

Terry L. :

545 allows the trustee, not the debtor to strip statutory liens.

Terry L. :

In the scenario, the court may strip part of the judgment lien if some intereferes with the exemption and some does not.

Terry L. :

Do you have any questions?

Terry L. :

Since your fact pattern is talking about property tax lien...

Terry L. :

These sections do not apply. Property taxes run with the land, and are not dischargeable in bankruptcy.

Customer:

The thing is that I filed the 522f while my bk was open, did the appraisal and everything ( I am $150k in the hole on my mtg), my BK discharged but this other motion was still open. Now the attorney for the county is saying I am not personally liable for the prop tax lien but I cannot remove the lien from my house

Terry L. :

If the debtor is surrendering the property, the property taxes do not go after the debtor for collection, but they will stay on the title.

Terry L. :

If you dispute the taxes, you have to take that up with a property tax dispute,and follow your state rules on appealing the taxes.

Terry L. :

They are correct

Customer:

however another BK attorney on justanswer cfortunato said that if I can prove that I was insolvent at the time the tax lien was placed on my house, then under 545 it can be removed

Terry L. :

Property taxes are not personal, they are in rem (with the land)

Terry L. :

545 is a trustee motion, not the debtor

Customer:

so would the BK need to be reopened to use 545?

Terry L. :

You won't be able to eliminate tax debts from the title of the property.

Terry L. :

Only the trustee can strip statutory liens from property to sell it.

Terry L. :

If the trustee is not interested in selling, they won't do it. There is no point

Terry L. :

A debtor won't be able to strip off tax liens. They are not personally liable for the debt, but tax liens will remain on the home since they run with the land. The lender who forecloses clears up taxes thru the foreclosure process. If the debtor wants to sell the property, the sales price must account for the tax liability to be paid, which is often done if the lender agrees to take less to facilitate (short Sale)

Terry L. :

any other questions?

Customer:

ok thank you for the info I guess this other guy is wrong - so technically, if I have prop taxes that are 5 years old and I kept my house through the bk, if I can't remove the lien, the county could actually take the house right?

Terry L. :

they could sell the taxes yes, and if not redeemed, then the property could be sold to the tax purchaser, yes.

Terry L. :

talk to your lender, often they will pay them off and escrow in your taxes.

Terry L. :

or you can take care of them in a complete refinance.

Customer:

ok actually the county attorney is interested in settling for some amount, so I guess that is my only option at this point

Terry L. :

it could be, talk to your lender

Customer:

ok thank you - can I ask future questions directly to you in justanswer?

Terry L. :

I think the prior expert did not see that this was a property tax issue, not just a judgment lien.

Terry L. :

sure.

Terry L. :

feel free to request me in the question and I'll grab it!

Terry L. :

thanks

Customer:

ok great I am hitting accept - oh the other guy knew it was a statutory lien, I asked him around 5 separate questions and was clear about it - so he was just plain wrong

Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2543
Experience: Better Business Bur 15yrs bankruptcy experience. Chicago Bar
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Terry L.
Terry L.
Bankruptcy Lawyer
2543 Satisfied Customers
Better Business Bur 15yrs bankruptcy experience. Chicago Bar