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Property tax installment plans – Help for unpaid property taxes.

 

Many local governments allow homeowners the ability to enter into property tax installment plans. For many homeowners, real estate property taxes can feel like a second mortgage. When times are tough, whether due to a job loss or unexpected emergencies, falling behind on property taxes can quickly spiral into a serious crisis. That’s where property tax installment plans come in with more details below.

Unlike other debts, delinquent property taxes carry particularly harsh consequences. If unpaid, local governments can tack on interest, penalties, and eventually in worst case even seize and auction your home in local tax auction – a form of foreclosure.

Why installment plans exist

Across the country, counties and local municipalities have introduced payment agreements that give homeowners extra time to pay what they owe. As the fact is that if you do not pay your property tax bill on time, most governments will charge you interest, fees and / or other penalties. Those will accrue as well, usually per month, on the total balance of unpaid property taxes.

These installment programs can stop fees from snowballing and ideally prevent a foreclosure. They provide families more time to pay the real estate bill(s) to hold onto their homes. Additional good news is that usually these extra charges can be rolled into some form of an installment plan and also when you enter into the plan these often monthly fees and additional charges may stop accruing on your account.

What are property tax payment plans?

An installment plan essentially converts a large, overdue tax bill into manageable monthly or quarterly payments. Instead of facing a lump sum demand and the threat of a tax sale or auction of the home, a homeowner can enter a structured plan that may span one to ten years, depending on the local rules. During this period, foreclosure proceedings are usually paused, as long as the homeowner makes every scheduled payment on time. Note the exact details and terms of the plan will vary based upon your local municipality.

 

 

 

Many jurisdictions also have hardship-based variations. These property tax installment payment programs are especially important for seniors on fixed incomes, disabled homeowners that need mortgage help, or those who recently lost jobs. For example, some counties require proof of unemployment or medical hardship, while others ask for an affidavit explaining the situation. In exchange, the homeowner may qualify for longer repayment terms, lower interest, or even temporary deferral.

How long do I have to pay past due taxes?

As with anything having to do with property taxes, the exact terms will vary based upon your local government rules and regulations. That being said, the range may be anywhere from one to up to ten years. Some of it is also open to negotiation. Make sure that the terms of any agreement are adhered too and that all payments are made on time.

Any negotiated program, and the length of the agreement, will be effective after the local government officials have thoroughly reviewed the owner’s ability to pay and the request from the homeowners. Oftentimes the plans may require the submission of an affidavit stating the reasons for the request for a payment plan, so the homeowner is held to the terms of the deal.

What are the conditions of property tax installment plans?

Again, as noted, the the exact terms and details will vary from county to county and state to state. Some of the common criteria include the following:

  • The homeowner will need to swear, under penalty of law, that their application and that the conditions that they gave for eligibility for the tax installment plan are true.
  • The applicant will need to be the owner of the real estate property according to the assessors records with only residential properties covered.
  • The reason for the missed payment(s) usually needs to be a recent issue and hardship that the person is facing.
  • The homeowner will need to pay each and every monthly or quarterly installment on time. Usually if they miss a single payment then the agreement will be null and voided.

 

 

 

If the taxes still are not paid after that timeframe, than a public auction may be held and your home will be sold at the auction. If you do not want to lose your home in the auction, just make timely payments on your installment plan.

How do I start the process and who do I contact - take action before it’s too late

The most important step is to act early. If you wait until your home is already scheduled for a tax auction, your options shrink dramatically. In many cases, simply starting the conversation about missing, and wanted to pay the tax bill, can open doors to installment plans, abatements, or referrals to nonprofit partners.

You can either call your local government tax office and initiate the communication yourself. Or you can contact a property tax consultant or lawyer. Many of these professional work on a contingency basis.

Some homeowners handle this directly. Others prefer to use a property tax consultant, attorney, or housing counselor. If you cannot afford professional help, nonprofit legal aid programs may assist for free. The federally funded Legal Services Corporation (LSC) operates in every state with details on the LSC program by state here. Many of its partner organizations specifically help with housing and foreclosure prevention. A lawyer may be able to help a homeowner enter into a payment program. Or you can contact a property tax consultant or lawyer. Many of these professional work on a contingency basis.

Community action agencies are another valuable resource for struggling homeowners. These local nonprofits (with a list of state community action agencies) are funded by federal and state programs, often employ housing counselors who can guide you through installment applications and even negotiate with tax offices on your behalf.

These programs aren’t designed to be permanent solutions, but rather provide time to households so families get the time and structure needed to recover financially. By reaching out to your local tax office, exploring hardship options, and looking into free legal aid or nonprofit support, you can often avoid the worst-case scenario of losing your home.

 

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By Jon McNamara

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