I have owned my home for seven years now. I have a couple of late payments and very bad credit. I am doing a bankruptcy soon. I owe $24,000 in property taxes and only have $12,000 of that. Will my bank pay the rest of the taxes and add it to my mortgage? How would they proceed?
The answer is, it depends. Assuming you file a Chapter 13 bankruptcy, you may be reaffirming the debt on your home. The mortgage lender may choose to pay the tax shortage for you and add that to your debt. If the property has depreciated and the lender doesn't feel he will be able to get those funds back, he could allow the taxing authority to be paid in your bankruptcy plan or he could walk away to cut his losses. We can't answer what he will do, but recommend that you have your bankruptcy attorney talk with the bank, so that a plan of action can be made that will best meet everyone's needs. The lender may provide assistance in order to get some preferential treatment. What you don't want to do is surprise everyone with this at the last minute.
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The answer is, it depends. Assuming you file a Chapter 13 bankruptcy, you may be reaffirming the debt on your home. The mortgage lender may choose to pay the tax shortage for you and add that to your debt. If the property has depreciated and the lender doesn't feel he will be able to get those funds back, he could allow the taxing authority to be paid in your bankruptcy plan or he could walk away to cut his losses. We can't answer what he will do, but recommend that you have your bankruptcy attorney talk with the bank, so that a plan of action can be made that will best meet everyone's needs. The lender may provide assistance in order to get some preferential treatment. What you don't want to do is surprise everyone with this at the last minute.
