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Bankruptcy and Tax Sale - Will MRFS work?
Anonymous3 views3 answers
There were responses on this board that filing bankruptcy can and would stop a tax lien/deed sale on a property, if filed before the sale takes place. On another board, it was stated that: sure, the sale would be stopped. However, the Tax Lien party need just pay $150 and file a Motion for Relief from the Automatic Stay (MRFS). This MRFS would be quickly approved by a Judge and they could have their Order granting the motion in as little as 3 weeks.
Can someone please comment on both? the tax lien party mentioned above - is that the tax assessor, or the tax investor who has purchased the lien? Can the tax assessor still sell the lien/deed at the tax sale even if the property owner is in bankruptcy - and under what conditions may they do so?
Unless there is substantial equity in the property for a Chapter 7 Trustee to garner through sale, there would be no basis to deny a motion for relief from stay of a creditor secured by the property. If said creditor (in your case I'm assuming it's a county tax assessor) has rights under your state's laws to sell (or foreclose on) your property, all filing the bankruptcy case does is temporarily stop the sale until the creditor obtains relief from the automatic stay or until the bankruptcy case is closed (the latter of which usually occurs approximately 4-5 months after the case is filed).
Mark J. Markus, Attorney at Law
http://www.bklaw.com/
The notice requirement makes 3 weeks to relief impossible. However, I agree with the prior response. In Virginia, we have a state law that allows local governments to have ordinances making real estate taxes a lien against the property automatically. If that is the case where you are, then the lien already happened. Chapter 7 will not remove the lien. Chapter 13 can not only stop it, but allow you to pay it off provided you have the income to do so.
Contact counsel now to discuss options before it is too late.
[This communication is intended as general information and not specific legal advice, and this communication does not create an attorney-client relationship.]
