When property owners including homeowners do not pay real estate taxes the County can “sell” the taxes to a “tax buyer.”
HERE'S HOW IT WORKS:
If the taxes are delinquent for more than one (1) year the county sells the taxes. A tax buyer pays the county the amount of the delinquent taxes. The property owner is given a period to redeem. The time period to redeem is 2 1/2 years for homeowners but only 2 years for other property owners. The property owners receive a certificate that gives the date of the redemptions and the estimated amount that has to be paid to redeem. When the redemption expires without payment the tax buyer can file a petition to claim the deed. If successful, the tax buyer is now the owner of the property, free and clear of liens. When it becomes close to the expiration of the redemption the amounts become very high. During the period of redemption there are costs, new tax payments, and high interest rates. This snowball effect makes it extremely difficult for the property owner to redeem the property. An example: homeowner's taxes were sold for less than $700. At the time of the redemption the amount jumped to over $7,000!
THERE IS A WAY TO SAVE YOUR HOME!!!
You can file a Chapter 13 allowing you time to pay the amount of the redemption. Rather than one lump sum the homeowner can pay in monthly installments even up to 5 years.
The right to file a Chapter 13 to pay the redemption was not settled law. NOW IT IS!! The 7th Circuit Court of Appeals is essentially the governing court for Northern Illinois. In a case just handed down they have affirmed the homeowners' right to file a Chapter 13 to save their homes and pay the redemption amount over a period of years.
Additional resources provided by the author
If you are in danger of losing your home because of back real estate taxes please consult with an experienced lawyer who concentrates in Consumer Bankruptcy law.
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