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I surrendered property in bankruptcy. The bank never changed title. Do I have to pay the taxes? Can the bank still foreclose?

Chicago, IL |

The debts were discharged in bankruptcy in 2002. The home on the property was destroyed by a fire. To date, the bank has not foreclosed or changed title. Property taxes keep accruing and I received a notice of sale of certificate of delinquency and filing of lien. Am I still responsible for the property taxes? Is there a statute of limitations for the bank to foreclose and change title after a bankruptcy? It is unjust that the bank can drag this out for over a decade, especially after I have straightened out my credit score. What can I do in this situation and what are the possible outcomes

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Attorney answers 4


You ask if you are responsible for a property despite surrendering it in a bankruptcy; as well as whether there is a "statute of limitations" on the bank's right to foreclose; or can it drag things out. Finally, you ask broad questions that absolutely cannot be answered here - "What can I do" and "What are the possible outcomes." We would run out of room before these last questions could be answered, so let's focus on the first 3 instead.

(1) Surrendering real property in bankruptcy does not deprive you of title. That can only be done by a Court of law in response to a foreclosure action - by your Bank, by the County for property taxes, or as the result of a Mechanics Lien.

(2) If you fail to pay property taxes and maintain the subject property it may be lost (as set forth above) due to a tax lien.

(3) For a number of reasons, there is no statute of limitations on a bank's right to foreclose, nor is there a way to put pressure on the bank to act quickly. In good times banks foreclose fast to safeguard their collateral. In times like these banks won't foreclose right way; they prefer a wait see approach. Until you bank does choose to foreclose, you are responsible for the property.

My office has dealt with situations like these for years; feel free to contact us for a no-cost office consultation. We look forward to speaking with you.


The chapter 7 resulted in a discharge of your personal liability for the mortgage. The chapter 7 case did not change the ownership of the property. You are still the owner of the property until the bank completes a foreclosure sale of the property, confirms the sale and records a deed. The chapter 7 does not discharge debts that arise after the date the case was filed. You will continue to be liable for the taxes. There is no law that compels a bank to foreclose. There is a new law taking effect on June 1, 2013 that would permit the bank to fast track the foreclosure because the property is vacant. You will have to wait and see if the bank uses the new law.


In Arizona, I believe the property taxes would "run with the land," and would therefore not be a personal obligation (even after bankruptcy). It is important for you to consult with a local attorney to discuss the details.

**Please note that this answer is for general purposes only and does not establish an attorney-client relationship. If you are interested in consulting with me regarding your legal issue, please call my office at 602-266-1717 and ask to schedule a consultation; be sure to tell them you found me on AVVO!


Property taxes run with the land. Unless you intend to keep the land and at some point rebuild, you are liable only to the extent that that you are on title. If you do not pay, the debt is auctioned off and a tax deed will issue after a period of redemption. At the end of the day, if you cant get the mortgage issue resolved, the taxes up to date, and rebuild in the near future, you would be throwing good money after bad.

My two cents.

William Lohrman

Law Office of William D. Lohrman
487 Grape Vine Trail
Oswego, IL 60543
Ph: 630.849.6196

General legal advice is offered for educational purposes only. A consultation with a qualified attorney is required to determine specific legal advice as to your situation and applicable law. We are a debt relief agency and we help people file for relief under the bankruptcy laws.

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