Will you face more taxes if your home falls into foreclosure?

February 29th, 2008

foreclosureIt might seem obvious, but if your home falls into foreclosure, you won’t have to worry about home taxes. The good news about home foreclosure and taxes is that you won’t have to pay home taxes once your home goes into foreclosure. A foreclosure means that the lending institution has taken control of your home and is going to sell the remaining mortgage in a court home foreclosure sale. The taxes on your home will be paid by the lending institution until they have found a buyer for your home. Your part of foreclosure is losing your home. All liens which would include taxes on your home will have to be settled by the lending institution or by the new buyer or worked out before sold in court as a home foreclosure.

Once your home has gone into foreclosure, you will be notified by the lending institution to leave the premises. If the matter has gone to court, the local sheriff will serve the foreclosure notice and have you evicted. Since you have already gone into foreclosure because you couldn’t meet your mortgage payments, there is no way that you can pay your taxes let alone more taxes. Your taxes will only be those that you will get if you buy another home. The home that went into foreclosure will still have taxes levied against it but the responsible party to pay those taxes will be the new owners whether they be the lending institution or a new buyer.

Usually, foreclosure is part of a bankruptcy. If you are in bankruptcy, your lawyer will advise you as to your options in working out the best deal for you before you go in front of the bankruptcy judge. Your assets will be sold and used to pay off some of your debts. Those debts don’t usually include property taxes. Of course, your property will continue to be assessed by the tax collectors. However, you won’t have to worry about those taxes since you will have lost your home from foreclosure. Knowing about foreclosure is very important and the person to ask is your lawyer once you are being threatened by foreclosure from your bank or lending institution.