Drowning in Nassau County Property Tax Bills? Chapter 13 Bankruptcy Can Be Your Lifeline to Catch Up on Delinquent Payments
Nassau County homeowners face a harsh financial reality: the median effective property tax rate of 2.10% results in annual tax bills of $11,613, which is $9,213 higher than the national median property tax bill of $2,400. When financial hardships strike, these crushing tax bills can quickly spiral into delinquency, threatening your most valuable asset—your home. Fortunately, Chapter 13 bankruptcy offers a powerful solution to help you catch up on overdue property taxes while protecting your property from foreclosure.
The Nassau County Property Tax Burden
Nassau County’s effective property tax rate is notably higher than the national median property tax rate of 1.02%, making it one of the most expensive places in the nation to own property. With approximately 423,000 properties, Nassau County is the second largest assessing jurisdiction in the State of New York. The county’s complex four-class property tax system affects different types of properties differently, but homeowners across all categories face substantial annual obligations.
Property tax bills in Nassau County are typically divided into two separate bills: School Taxes and General Taxes, each with multiple payment installments. The first half is due October 1st with no penalty until November 10th, while the second half is due on April 1st with no penalty until May 11th. When homeowners fall behind on these payments, the consequences can be severe.
How Chapter 13 Bankruptcy Addresses Property Tax Debt
Chapter 13 is a very effective tool in catching up on delinquent property taxes. If you qualify, Chapter 13 will allow you time to come current on your property taxes and stop a foreclosure. Unlike Chapter 7 bankruptcy, which involves liquidation of assets, Chapter 13 allows you to keep your home while creating a manageable repayment plan.
Under Chapter 13, debtors propose a repayment plan to make installments to creditors over three to five years. Property taxes are secured by tax liens against the property, so any balance owed must be paid in full in the Chapter 13 plan. However, this doesn’t mean you need to pay everything immediately—the beauty of Chapter 13 is that it spreads these payments over the life of your plan.
Priority Treatment of Property Tax Debt
Property taxes receive special treatment in bankruptcy proceedings. Secured and priority debts, like property taxes and newer tax debt, must be paid in full as part of your Chapter 13 payment plan. Priority claims are those granted special status by the bankruptcy law, such as most taxes and the costs of bankruptcy proceeding.
This priority status actually works in your favor because your bankruptcy attorney will generally prioritize the payment of your non-dischargeable tax debts over other debts, such as credit cards or medical bills. The goal is that, at the end of the payment period, your tax debt will be reduced to $0, and your other debts will be discharged, leaving you with a clean balance sheet going forward.
The Automatic Stay Protection
One of the immediate benefits of filing Chapter 13 bankruptcy is the automatic stay, which provides instant relief from creditor collection activities. When facing property tax foreclosure, you may be able to use a Chapter 13 Bankruptcy to put a pause on the property tax foreclosure proceedings and buy yourself time to pay everything you owe. This breathing room is crucial for homeowners facing imminent foreclosure due to delinquent property taxes.
Working with Experienced Bankruptcy Counsel
Navigating Nassau County’s complex property tax system while managing bankruptcy proceedings requires experienced legal guidance. If you’re struggling with delinquent property taxes, consulting with a qualified Bankruptcy Lawyer Nassau County can help you understand your options and develop an effective strategy.
The Law Office of Ronald D. Weiss, P.C. concentrates in bankruptcy solutions and is experienced in representing individuals and businesses in Suffolk County, Nassau County and the greater LI and NYC areas in all chapters of the bankruptcy code. The Law Offices of Ronald D. Weiss, PC have been supplying expert bankruptcy, foreclosure defense, and debt negotiation services since 1993, offering practical, compassionate solutions customized to each client’s financial situation.
Ongoing Tax Obligations During Chapter 13
While Chapter 13 helps you catch up on past-due property taxes, it’s important to understand your ongoing obligations. During the 3-5 years of new property taxes that accrue during your bankruptcy, these new taxes will not be part of your Chapter 13 repayment plan. The taxes that come due are considered an “administrative expense” necessary to maintaining your estate while the bankruptcy is pending, and it will be up to you to pay these new taxes in full before your repayment plan is finished.
Tax Deduction Benefits
An often-overlooked advantage of paying property taxes through a Chapter 13 plan is the potential tax benefits. Property taxes paid through the plan should be deductible, helping to reduce your overall tax burden during the repayment period.
Taking Action Before It’s Too Late
If you’re falling behind on Nassau County property taxes, don’t wait until foreclosure proceedings begin. A Chapter 13 bankruptcy will leave you with no balance owed on your property taxes, and no reason to foreclose on your home. Your bankruptcy attorney can help you work with the county to confirm that the foreclosure proceeding will be dismissed as soon as the stay is lifted, so you can keep your home.
The key to success with Chapter 13 bankruptcy for property tax relief is acting quickly and working with experienced counsel who understands both Nassau County’s property tax system and federal bankruptcy law. With proper planning and execution, Chapter 13 can provide the structured relief you need to save your home and regain financial stability.