When the owner of real property fails to make regular payments on municipal debt levied on his/her property, that property may be sold at a real estate tax sale to allow the city/municipality to recover any unpaid debt. These debts can include outstanding water and sewer bills, school district taxes, and real property taxes. The sale process to collect on unpaid debt is similar to the more common judicial sale of real property known as mortgage foreclosure. However, with respect to tax sales, the Plaintiff, or collecting entity is the municipality due and owing monies from the homeowner(s) rather than the Plaintiff being the mortgage company as in mortgage foreclosure proceedings.
If a homeowner files a Chapter 13 Bankruptcy prior to the Real Estate Tax Sale, by virtue of the automatic stay imputed in a bankruptcy the tax sale will be stayed. The Automatic Stay is governed by 11 U.S.C. Section 362 and allows a homeowner time to restructure the debt(s) due and owing and repay in order of creditor priority. Chapter 13 bankruptcy allows a Petitioner to repay their debts over a three to five year period and is based on affordability. Among the debts that can be repaid through a Chapter 13 plan are arrearages (that is, delinquent payments) on water and sewer bills, school district taxes, and real property taxes.
To speak with one of our lawyers regarding your financial situation and to determine if Bankruptcy Law is right for you, please contact one of our conveniently located law offices listed below.
CENTER CITY PHILADELPHIA: 1315 Walnut Street, #302 Phila., PA 19107 215-545-0008
NORTHEAST PHILADELPHIA: 2375 Woodward Street, #105 Phila., PA 19115 215-545-0008
DELAWARE COUNTY OFFICE: 1515 Wallingford Road, #218, Springfield, PA 19064 610-432-3111