Real Estate Tax Foreclosure Lawyers in Pennsylvania
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How Can Sadek Bankruptcy Law Offices Legal Offices Help You?
Many people understand that if you take out a bank loan on your home and miss payments you may be faced with a private mortgage foreclosure.
Similarly, if you don’t pay your state property taxes, your city or municipality may file a tax foreclosure action or real estate tax sale seeking to sell your home for unpaid property taxes.
In Pennsylvania, a debate has long raged regarding the need for property tax relief. Homeowners and others across the Commonwealth are increasingly being asked by their city, town, and municipality to pay significant property tax increases year-after-year.
In many cases, this means that hard-working homeowners in Pennsylvania are falling behind on their property tax obligations or related debts.
In some instances, a property owner may be delinquent on city or municipal debts which can include water and sewer bills, school/education taxes, and city property taxes.
What Is a Tax Lien Foreclosure?
A tax lien foreclosure is a legal process where a government authority or municipality forecloses on a property due to unpaid property taxes. When property taxes are not paid, the local government places a lien on the property, signifying a legal claim against it. If the delinquent taxes remain unpaid for a certain period, these delinquent estate taxes are subject to tax foreclosure on the property.
During a tax lien foreclosure, the property is typically auctioned off at a public sale. The highest bidder at the auction receives a deed to the property, subject to any redemption period that may be in place. This redemption period allows the original owner a final opportunity to pay the overdue taxes plus any additional costs to reclaim their property.
The process and specifics of tax lien foreclosures can vary by jurisdiction, including the length of the redemption period and the exact procedures for auctioning the property. Tax lien foreclosures are different from mortgage foreclosures, as they specifically relate to unpaid property taxes rather than unpaid mortgage payments.
Tax Sale vs Tax Foreclosure
A tax deed sale is a process where government authorities sell foreclosed properties or their tax liens to recover unpaid property taxes. The sale can involve selling the tax lien certificate to a third party who then has the right to collect the owed taxes, often with interest.
A tax lien foreclosure is a legal process where the government takes ownership of the property due to unpaid taxes, subsequently selling it outright to recover the debt. While a tax sale focuses on transferring the lien or rights to collect, a tax foreclosure results in the loss of property ownership.
Sheriff’s Sale vs Tax Foreclosure
A sheriff’s sale is a public auction of property repossessed to satisfy unpaid taxes, typically resulting from mortgage foreclosures or court judgments. It is conducted by the office of the county sheriff or a local law enforcement official, with the proceeds from the tax foreclosure properties used to pay off the debt owed by the property owner.
A tax foreclosure specifically addresses unpaid property taxes, where the government forecloses on the property and sells it to recover the delinquent taxes. While both involve selling property due to unpaid debts, sheriff’s sales can stem from various types of debt, whereas tax foreclosures are solely related to unpaid property taxes.
How Does a Tax Foreclosure Happen in Pennsylvania?
Suppose a property owner fails to pay their property taxes for a certain amount of time. The local government can then place a lien on the property. If those taxes remain unpaid for an extended period, the government can take ownership of the property and initiate the foreclosure process.
The property is then typically auctioned off at a public sale to recover the delinquent taxes. The foreclosure process varies by jurisdiction, but generally includes notifying the property owner, providing a redemption period to pay the owed taxes, and conducting the sale if the taxes are not paid.
What Is the Redemption Period for a Tax Lien Foreclosure?
The redemption period for a tax lien foreclosure is a specified time frame during which the property owner can reclaim their property by paying the delinquent real estate taxes, interest, and any additional costs. This period varies by jurisdiction and can range from a few months to a few years. During the redemption period, the owner retains the right to redeem the property and prevent the foreclosure sale from becoming final. If the owner fails to redeem the property within this period, the purchaser at the tax lien sale may obtain a deed to the property, finalizing the foreclosure process.
Tax Foreclosure Lawyers in Philadelphia
The attorneys of Sadek Bankruptcy Law Offices are proud to represent homeowners facing difficult financial situations. We fight aggressively and strategically to protect our client’s home.
To schedule a free and confidential consultation, call our law firm at 215-545-0008 or online.
Why Are There Tax Foreclosure Sales in PA?
Under Pennsylvania’s Real Estate Tax Sale Act (RETSA), all taxes that are lawfully levied in the state are considered the primary lien against the property.
A primary lien has priority over all other obligations on the property.
As such, it is not out of the ordinary for unpaid property taxes and other city or municipal debt to serve as the basis for a home foreclosure under RETSA.
What Happens if I Fail to Satisfy the Tax Debt?
If the taxes are left unpaid, the City/Municipality may eventually take legal action to collect the debt by foreclosing on the home and selling the property at a tax sale (sometimes called a sheriff’s sale).
Alternatively, the sale is known as an upset sale. A buyer who takes possession of the property through an upset sale takes his or her possession subject to all recorded mortgages, liens, claims, rent, or PA Revenue lien not accounted for in the purchase price.
If the upset sale is not successful, the local tax board may petition the relevant Pennsylvania Court of Common Pleas to schedule a judicial sale. A judicial sale is the second and subsequent means by which your property can be sold.
Sales through the judicial process are generally more likely to result in a completed sale because the purchaser will take the property free of all other claims except for ground rents.
What Can I Do To Stop a Tax Foreclosure?
Property owners have rights in tax sale situations. Sadek Bankruptcy Law Offices can help homeowners protect their homes from tax sales by filing a Chapter 13 Bankruptcy before the sale. This filing triggers an automatic stay under 11 U.S.C. Section 362, halting the sale and allowing the owner to stay in their home. Chapter 13 Bankruptcy lets homeowners repay debts over three to five years, including arrearages on water, sewer bills, school district taxes, and real property taxes, while staying current on future real estate taxes.
Unlike mortgage foreclosure, tax foreclosures offer a right of redemption, allowing owners or interested parties to petition the court to reclaim their property within nine months from the acknowledgment of the Sheriff’s Deed, though this right doesn’t apply to all properties. In judicial sales, conducting a title search and reviewing procedures may reveal errors by the local tax board or other parties, offering further relief opportunities.
Call a Pennsylvania Tax Lien Foreclosure Attorney at Sadek Law Today
If you’re facing the daunting prospect of a tax foreclosure in Pennsylvania, it’s crucial to understand your rights and options. At Sadek Law, we specialize in helping homeowners understand the complexities of bankruptcy and foreclosure. Our experienced Philadelphia bankruptcy attorneys are dedicated to protecting your home and guiding you through every step of the process.
Whether you need assistance with filing for Chapter 13 Bankruptcy to halt a foreclosure or exploring your right of redemption, we’re here to provide the expert legal support you need. Contact Sadek Law today to schedule a consultation and take the first step toward securing your financial future.
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