Bankruptcy

Our office understands that bankruptcy creates a great deal of stress and personal hardship. We will work with all taxpayers who find themselves in this situation to ease that burden however we can.

Still, taxpayers in bankruptcy have obligations that they must meet to avoid worsening their financial hardships. In most cases, taxpayers must remain current on their property tax payments, and any fees and interest on those payments incurred after filing for bankruptcy.

The exception to this general rule is a Chapter 7, or “no asset,” bankruptcy filing. In this type of bankruptcy action, the taxpayer effectively claims no ability to pay from any source, and agrees to surrender his or her property as a part of the case’s resolution. Even in this case, you will continue to receive tax bills and statements in your name until a new owner assumes the property, as Ohio law requires our office to send tax bills to the property’s legal owner (or a designated agent).

For most debts, filing for bankruptcy effectively hits the “pause” button – the court freezes late penalties and interest until after the case is resolved. This is not so with property taxes, which continue to accrue late penalties and interest while the case is pending.

You should know that it is illegal for anyone to pursue legal action against a property included in an active bankruptcy case, unless the court has granted a specific exception. This includes tax liens and foreclosures. If you are in an active bankruptcy case, and you receive a notice regarding an impending tax lien sale, please contact our office at 330-297-2243 immediately with your bankruptcy case number.

Lastly, you should always inform your attorney of any changes in the status of your taxes, as this can have an impact on your bankruptcy case. Your attorney will only be as effective in representing you as you are in providing current and correct information.

If you have any questions about how bankruptcy impacts your property taxes, please contact us at 330-297-2243.

Working together, we can ensure that you emerge on the other side of your difficulties prepared to move forward with your financial future.