Will Banks Pay Property Taxes after Foreclosure?

There are many emotions to deal with, many issues to address and many questions to answer during the foreclosure process. One of the most important questions deals with property taxes. Will banks pay property taxes on delinquent mortgages?

Whether or not a person is responsible for those property taxes can depend on where a person lives. In some states, the liability follows the property and not the owner, according to one attorney. Those laws can vary from state-to-state.

It's important to remember that property taxes are a debt against an actual property, not against the actual property owner. When a home owner walks away from that home, the remaining property tax are a lien against a home, not the former home owner. A governing body does have the power to collect on property tax payment by executing a seizure and sale of the home in order to satisfy any unpaid property taxes. Those government bodies cannot seize a property owner's checking accounts to satisfy the outstanding debt. When it comes to foreclosed properties, government bodies turn to the lenders of the foreclosed properties for any remaining property taxes owed.

Tax liens against properties can hinder or prevent the sales of those properties to which they are attached. When the owner loses the home to foreclosure, new owners (such as the bank) can be responsible for the existing property tax lien.

It can be confusing and frustrating for the person dealing with foreclosure. Talk to a qualified bankruptcy attorney who can answer your questions and go over the process.

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