A story was recently published in the Beaver County Times about a Center Township woman whose house was sold at a tax sale in 201, because she owed $234.72 to the Center Area School District for real estate taxes. The problem started in 2008 when she paid her real estate taxes six days late. This caused there to be a $6.30 late charge added to her account. She never paid the $6.30 late charge. Two years later, the $6.30 had grown to $234.72 due to interest being added, and her house was sold to the highest bidder. While the sale of this woman’s home, which she is fighting in court, is an extreme story, it does demonstrate how important it is to pay your real estate taxes.
If your real estate taxes are included, or escrowed, into your mortgage payment, as long as you keep up with your mortgage payments, your real estate taxes will get paid automatically by your mortgage company. If you don’t have a mortgage that escrows your real estate taxes or you don’t have a mortgage at all, you must make sure that you pay your real estate taxes on your own in order to keep your home.
This can be a challenge as real estate tax bills are often high and you only have a few months to get the money together before they are considered delinquent. The best way to deal with this is to save up a little bit of money each month so that when the taxes become due, you have all of the necessary money saved. This is easier said than done, as I often see clients who had the best intentions to save money for their real estate taxes but had emergencies like home repairs, car repairs or medical expenses for which the real estate tax money had to be used.
What if you fall behind?
What should you do if you find yourself falling behind on your real estate taxes? The best way to deal with this problem is to contact the taxing authority as soon as you realize you will not be able to pay the tax on time and ask to be put on a payment plan. Taxing authorities are usually more than willing to put you on a payment plan to assist you in getting caught up on the taxes in an affordable way.
Unfortunately, not everyone knows that they can get on a payment plan to pay their real estate taxes if they don’t have the money to pay them all at once. Also, there are people who have really fallen on hard times and don’t have the money to afford the payment plan for their real estate taxes. The homeowners who become seriously delinquent, two years behind or more, on their real estate taxes are in danger of having their homes sold at a tax sale.
Beaver County, like all counties in Pennsylvania other than Allegheny and Philadelphia, has a county tax bureau. When real estate taxes become delinquent, the school districts and municipalities refer the accounts for collection by the county tax bureau. The tax bureau will attempt to collect those taxes and will hold a tax sale once a year for those properties for which the real estate taxes are two or more years delinquent. In Beaver County, the annual tax sale will be held September, 16. In order to prevent the tax sale, you must pay the taxes in full, including all penalties and interest, or agree to a payment plan with the tax bureau. The problem is that the payment plan often involves a large down payment, which is not affordable for many homeowners.
Luckily, if the payment plan that the tax bureau offers you isn’t affordable, you do have another option. Most people don’t realize it, but a Chapter 13 bankruptcy can help you get caught up on the real estate taxes in a way that is much more affordable than the payment plan that a tax bureau will offer you right before a tax sale. A Chapter 13 allows you to pay the delinquent real estate taxes off over 5 years and immediately stops the sale.
If you are behind on real estate taxes, contact the taxing authority as soon as possible in order to get put on a payment plan. If the payment plan is not affordable, give Steidl & Steinberg a call at 800-360-9392. We have helped thousands of people stop tax sales and get caught up on delinquent real estate taxes. If your house is up for sale in Beaver County next month, don’t ignore the problem. I can meet with you in the Beaver office for a free, in-person consultation and explain how a Chapter 13 can help you keep your home.