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TJ, Esq.
TJ, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 11641
Experience:  JD, MBA
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This is a Colorado Bankruptcy Question.I purchased a tax

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This is a Colorado Bankruptcy Question. I purchased a tax lien on a commercial property in Denver and found out the underlying business filed Chapter 11 bankruptcy. The disclosure plan seeks to amortize the principal over two years and reduce the interest rate from 10% to 3%. If this plan is approved, would I lose the right to apply for a Treasurer's Deed? My three year holding period ends November 1, 2014, but if the plan is approved, the 2 year amortization period would extend to at least July, 2015.

Hello and thank you for allowing me the opportunity to assist you.

Yes, I'm sorry to say that the bankruptcy plan overrides the right to obtain a treasurers deed (i.e., federal law supersedes state law).

You have the right to object to the plan, and to vote against it. So you may wish to do that.

I am truly sorry to give you this bad news, but please understand that it would be unfair to you (and unprofessional of me) to provide you with anything less than an honest response. However, if your concerns were not satisfactorily addressed, then please let me know, and I will be happy to clarify my answer. I do ask that you rate me based upon whether I answered your question, and not based upon whether the answer was good news or bad news. Your positive feedback is greatly appreciated. Thank you for using our service!

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Customer: replied 3 years ago.

I have requested a refund because the answer you gave was incorrect. In further researching this issue, according to section 511 of the bankruptcy code as well as sections 1129(a)(9)(C) a bankruptcy court may not modify a property tax lien interest rate below the statutory rate:


§ 511. Rate of interest on tax claims
(a) If any provision of this title requires the payment of interest on a tax claim or on an administrative expense tax, or the payment of interest to enable a creditor to receive the present value of the allowed amount of a tax claim, the rate of interest shall be the rate determined under applicable nonbankruptcy law.

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