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Here is an example what would happen - http://clerkofcourts.co.walton.fl.us/default.aspx?id=39
As a property owner you are required to pay property taxes. If you fail to pay taxes, a tax certificate will be sold by the Tax Collector at a date and time advertised by the Tax Collector.
A tax certificate may be held between two and seven years. At any time between the second and seventh year, the certificate holder may request the sale of the property to satisfy the certificate. The certificate holder must apply for the tax deed sale by presenting the original certificate to the Tax Collector.
The Tax Collector then certifies the tax deed application over to the Clerk, who computes the base bid and charges the certificate holder for the costs of holding the sale. Once the costs have been paid, the Clerk sets a sale date, notifies the certificate holder, the property owner, and all lien holders, and the sale is held in accordance with Florida Statutes.
Notices of pending tax deed sales are published in a newspaper with local circulation. Tax deed files are available for inspection at the local Courthouse.
Tax deed sales are conducted at the specified time. Anyone may bid on the property, and must register with the tax deed clerk prior to the sale. The clerk announces each application, along with the name of owner and legal description, and the base bid. The floor is then opened for verbal bidding. The property is sold to the highest bidder.
At the time of the sale, the successful high bidder must post with the Clerk a cash, nonrefundable bond along with other fees. Upon payment of the remainder of the bid, the Clerk will issue a tax deed to the property. The sale is final when the tax deed is signed by the Clerk. The property owner may redeem his/her property by paying all back taxes and costs up until the Clerk of Court signs the tax deed.
If the certificate holder is not the successful bidder, he/she is reimbursed all monies paid, plus interest earned from the monies received from the successful bidder. Valid liens are then paid out of the monies received. Notarized claims must be submitted to the Clerk's office to substantiate a claim. The former property owner may claim any excess funds. If no claims are made on the excess funds, these funds are turned over to the Board of County Commissioners 90 days after the sale.
While the foreclosure procedure is vary by the state - in Florida creditors must be foreclosed by filing a lawsuit. As in any lawsuit, the debtor must be served with notice of the lawsuit should have an opportunity to appear and defend his/her rights.
All mortgages shall be foreclosed in equity.(chapter 702.01) - means generally the debtor is not obligated to pay any additional money in case the sale would not cover all debt. The taxes should be paid first and remaining balance would be your debt to the mortgage company.
The creditor has options to forgive the debt (that may be your taxable income!) or try to collect the debt.
A separate action for a deficiency must be filed within 4 years after the foreclosure sale. If the creditor win that judgment - the debt would be collected. Your wages or bank account may be garnished or lien may be registered against another property you owe.