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If you have received a notice in the mail or delivered to your home that your property is “subject to foreclosure,” or “in foreclosure,” because of unpaid taxes, there may be a possibility to stop or delay the foreclosure process and the sale of your home.

How Property Taxes Work
You are charged property taxes annually by the county in which your property is located in. Each year, taxes are collected, by the county, based on the value of your home. If your taxes are unpaid for three years, the county will start the foreclosure process. This will allow the county to sell your home in order to collect all past due property taxes.

What Will Happen if You Don’t Pay Your Taxes
The county will provide notice of the court hearing. Before the county can sell your home, they must give you at least 30 days’ notice of the court hearing for the foreclosure. On the notice, you must be told the hearing place, date and time. At the hearing you will be given the opportunity to tell the judge why the county should not foreclose your home. If you cannot produce a reason that your home shouldn’t be sold, the county will sell your home at auction.

Take Steps to Prevent Foreclosure
There are necessary steps and actions you can take to stop the property tax foreclosure. We will discuss some of them here.

Apply for a Property Tax Exemption
The first thing you should look into is the possibility that you’re eligible for a property tax exemption. If you have a limited or low income, there’s a chance you could be approved for a property tax exemption. In addition to having a limited or low income, some other requirements for being approved for a property tax exemption include:

  • You were a surviving spouse of someone getting an exemption and you were at least 57 years old in the year that the property taxes were due.
  • You were at least 61 years old during the calendar year that the property taxes were due.
  • You were unable to work because of a disability in the year that the property taxes were due.
  • You were a Veteran with a disability that occurred from military service.
  • You are the spouse of a Veteran who died or was disabled due to their military service.

Apply for a Property Tax Deferral
Aside from a property tax exemption, there is also a property tax deferral that you may be eligible for. If so, you may be able to delay payment or partial payment of your past due property taxes. To qualify for a property tax deferral, you must have limited or moderate income and equity in your home.

If you own your own home outright, you likely have equity in your home. Also, if your home’s value is more than what you still owe on the mortgage, you should have equity in your home as well.

If you are approved for a property tax deferral, the county will let you pay some of your property taxes at a later date thus delaying or canceling the foreclosure process. However, the property taxes still must be paid in in full in order to avoid the same issue in the future.

Apply for a Rescue Loan
Another option to stop property tax foreclosure is a Rescue Loan. You may be eligible for a rescue loan if you are able and willing to participate in housing counseling.

A Rescue loan is a thirty-year loan that usually carries an interest rate of 0-2% interest. With a rescue loan, homeowners must agree to receive foreclosure prevention counseling from a HUD-certified housing counseling agency. Homeowners are able to use Rescue Loans to pay off the past due property taxes and stop the foreclosure of their home.

File for Bankruptcy
The least appealing option to stop property tax foreclosure is to file for bankruptcy. While filing for bankruptcy is less than ideal, it could allow you to keep your home. When filing for bankruptcy the homeowner may usually pay all past due taxes over a three to five-year period while keeping their home.

If you believe that bankruptcy is your only remaining option, talk with a bankruptcy lawyer who can help determine if bankruptcy is the right choice for you and set you on a path best for you and your unique situation.

Contact a Knowledgeable Attorney for Help
If you have received notice of foreclosure because of unpaid property taxes, schedule your appointment with Jarrett Law Firm today. Our attorneys are experienced in this situation and will do all we can to stop the property tax foreclosure on your home.