abandoned property back tax can I be forced to pay?
Question: 17 years ago I went bankrupt (rental property). One particular distressed property which had a mortgage on it became abandoned (no one lived there) before the proceedings were over. After the bankruptcy was finalized I found the bank didnt want it. And I still was the deed holder. About 2 months after the bankruptcy was finalized the property was torn down. I was liable for the tear down which I paid. This property (a lot) is in a flood zone and can not be improved. It is completely worthless. I appear to be stuck with it forever. I owe back taxes and weed control on it. I moved out of the state 5 years ago, and now live 1000 miles away. 1. What legal action can the city, county, state take to recoup the back taxes? 2. Will I be stuck with this property forever? 3. So far this hasnt effected my credit. Will it? 4. What is the best solution? I thought of advertising the property with a 500 dollar landscaping credit (cash) in hopes someone in dire needs would take it over and aggree to assume all back tax’s as payment in kind to me for the lot. Is that legal since my reasoning is to get out of the back taxs?
Answer: And if they won’t take it, find another organization — a church, or whatever.
But I’m curious how it is that you filed a bankruptcy and remained in title to this land. Normally all free and clear assets are disposed of in the bankruptcy and the proceeds distributed to unsecured creditors. If the property has a lien (mortgage, etc.), then it normally goes to the lienholder. Unless you declared it to be a homestead, this is what should have happened. If you claimed it as a homestead, then you might have continued to own it after the bankruptcy, but given the situation you describe, this doesn’t make a lot of sense either.
Anyway, assuming that you really are still in title, there is another thing to consider. In practically all states property taxes are a lien on the property, but that is all. That is to say, they are what lawyers call a specific lien — they reach just the specified property. In contrast, a general lien is a lien which reaches everything you own. So if you don’t pay the taxes, all the taxing jurisdiction can do is foreclose on the property. If no one outbids them (likely in your case), they will end up owning it. They can’t come after your other assets for the unpaid taxes. (There are occasional exceptions, but this is generally the case.)
Property taxes generally do not affect one’s credit rating, nor does a property tax foreclosure. The reason is that credit reporting agencies depend on creditors reporting bad borrowers. The taxing jurisdiction doesn’t have an account with the credit bureaus, so they report nothing.
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