How To Stop Property Tax Foreclosure In North Carolina

What Is Property Tax Foreclosure?

Property tax is an annual payment made to the county that you stay in, which is based on the value of your property. If you default on the payment of these taxes, the process of property tax foreclosure begins. In North Carolina, the tax foreclosure timeline takes about three years to complete. After the completion of tax foreclosure proceedings, you lose your property and this can have an adverse effect on your credit. 

What Happens if You Do Not Pay Property Taxes in North Carolina?

All states, including North Carolina, have a process that allows the taxing authority to begin the foreclosure process. These processes begin if you do not abide with the North Carolina property tax foreclosure laws.

If you do not pay property taxes, you may be at the risk of losing the ownership of your home to a foreclosure sale. The taxing authority could put your home up for sale by auction, through the foreclosure process to satisfy your owed taxes. If property taxes are not paid at the appropriate time, you risk paying more with interests and penalties. 

Property Tax Foreclosure Process

When property taxes are not paid at the scheduled time, the tax is seen to be delinquent and charges are made. If the property tax is not fully paid after a year, the property is listed on a preliminary forfeiture list. Property tax foreclosure could  be stopped at this point by paying the owed taxes with the additional fees and interests. It is advisable to pay the owed taxes quicker because the interest rates increase from 1 percent in the first year to 1.5 percent after the first year.

If the owed taxes are not paid by the end of the second year, the property is forfeited to the county treasure. Forfeiture is not foreclosure as you can live in your house after your property has been forfeited. Nonetheless, to prevent property foreclosure at the forfeiture stage, your owed taxes can only be paid as a single payment as opposed to the instalments paid in the preliminary forfeiture stage.

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North Carolina Property Tax Foreclosure Sale

In North Carolina, property tax foreclosure sale commences with the Departments of Tax Administration docketing foreclosure judgement with the court system for defaulted payments on property taxes. This is the first step to selling the property at public auction for settlement of the tax lien. The judgment is docketed 30 days after the property owner is told, either by mail or publication.

However, delinquent taxes (including interests and costs) may be paid before the judgement is docketed or at any after (as allowed by the law) in order to prevent the foreclosure process.

North Carolina doesn’t sell charge lien endorsements; subsequently, installment of the duty lien before deal at public sale won’t move responsibility for property.

How to Save Your Home After a Tax Sale

Even after property tax foreclosure on homes commences, there are still options available to save your home. 

After a tax deed sale, your home can be reclaimed either by redeeming it or by setting aside the sale. Since most jurisdictions offer a right of redemption after the sale of a property, it is possible to get you home back. All you need to do is to reimburse the purchaser with the amount paid or pay the delinquent taxes, plus the interest with the redemption period. 

In cases where redemption cannot be done, you can set aside (or invalidate) the tax sale by:

  • Showing defects in the tax sale or tax lien process
  • Giving a valid reason why you defaulted the past tax amounts.

You can also save your home after a tax lien sale. This is because the purchaser only buys a lien against your property. Offset the lien (including interests) within a period and you can redeem your home.

Avoid a Property Tax Foreclosure Sale With Chapter 13

Best way to avoid a property tax foreclosure sale, is to fill a Chapter 13 reorganization plan. A chapter 13 plan is a legal way of initiating a structured repayment term with your creditors.

One of the Chapter 13 bankruptcy benefits is that you get to prioritize and consolidate your debts. For instance, secured creditors such as the County Treasurer are paid first before other lower priority creditors like medical or credit card bills.

Another benefit is the reduction of debt and interest rates. The plan requires that unsecured creditors be only paid your “best efforts”. Loan deficiency debts, medical bills and credit card bills often fall into this category. At the end of the program, any remaining balances are legally discharged or eliminated. 

You can also receive legal protection from your creditors and their actions by filing a Chapter 13 case. Also, bankruptcy attorney can protect you from:

  • Foreclosure
  • Vehicle dispossession
  • Harassing calls
  • Negative reports to credit bureaus

By focusing on and paying off your obligations, your spending will be brought into balance. Toward the culmination of the 36 – multi month program, you will be up to speed with got obligations, free off all debt without collateral and in the situation to make a new monetary beginning.

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How Resolving Unpaid Property Taxes Can Help

If there are property taxes owed outside of an escrow, they can also be resolved through a Chapter 13 program. Unpaid property taxes can be paid in instalments over the duration of the chapter 13 plan with no continued penalties. They take priority over unsecured debts. 

You can avoid a tax forfeiture sale by creating a structured program that offsets all payment before the 3-year mark. By participating in the chapter 13 plan, you have full legal protection against unpaid property tax foreclosure. 

Secure a Loan for Taxes

For property tax foreclosure help, you can also secure a loan. A property tax loan company can aid in offering you a loan that covers delinquent property taxes in North Carolina. Some of these companies do not even require credit checks or deposits to begin.

Securing a loan ensures a fast, efficient and effective way to relieve you of your tax debts. It would also help you keep your home while you work on improving your cash input.

Prevent a Tax Foreclosure Sale Due to Delinquent Taxes on Your Property

As a homeowner,  you may face with the difficulty of paying up your property taxes among other expenses which you have to meet up with. That means there is a possibility of finding yourself in a situation where you are unable to pay and which can result in your home facing a delinquent property tax foreclosure.

How Can I Stop Tax Foreclosure?

Opportunities abound for homeowners to avoid a property tax foreclosure, majority of these opportunities are embedded in the North Carolina tax laws. You can stop tax foreclosure through the following steps:
1. Before a foreclosure begins, the homeowner has to be duly and legally notified that the foreclosure process has begun. 
2. You could get current on a loan and pay back all owed taxes. This way, you possess the legal right to stop the foreclosure at any point before the sale of your home by paying all owed taxes, interests and penalties thereby releasing the tax lien on your property.
3. You can also redeem your home before or after losing it to a foreclosure sale. North Carolina law provides an upset-bid period which lasts for ten days after the report of sale is filed. 
4. During the upset-bid period, another buyer can bid for the home at a higher price at which another upset-bid period is repeated. The borrower has the right to pay back his owed taxes and interests in full, thereby redeeming the property.

How Long Does a Tax Foreclosure Take?

The duration of a tax foreclosure vary from place to place but generally, the foreclosure process takes about two years.

Can You Sell a House With a Tax Lien on It?

The conditions of a tax lien on your home must be well gratified before it can be sold or refinanced. 

Who Pays the Taxes When a Property Is Foreclosed on?

You shouldn’t pay property taxes when a property is foreclosed on. after a foreclosure, all the debts you owed will be paid due to the transfer of the property to the lender through a foreclosure deed. Therefore, the taxes are to be paid by your lender.

Contact Attorney to Get Property Tax Foreclosure Help

During a foreclosure, it is advisable to seek legal advice. Especially if you think you have a defense to the foreclosure and you want to retain your home and stop a property tax foreclosure. A skilled and experienced attorney can help you in your defense like when the servicer of foreclosing party is being fraudulent or dubious.

A foreclosure lawyer would also help you articulate and communicate your defense to the court and assist you in paperwork. Without an attorney, it is doubtful that a homeowner would stand a fruitful and effective defense to a foreclosure.