Tax Foreclosure: A Far Too Common Reality

How many times have you heard the story about the elderly homeowner who lost their house because someone paid their delinquent taxes for a small sum of money – far less than the value of the home that they had paid off in full many years ago?

Tax lien foreclosure frequently happens to elderly people who are having difficulty keeping up with their finances, even though they are totally capable of paying the bills.

As people get older the sheer complexity of paperwork sometimes becomes overwhelming – and that’s when the scavengers swoop in, pay the delinquent taxes, and a few years later get a tax deed to the elderly person’s home and threaten to evict them unless they pay an extortionate amount of money.

How The Supreme Court Saved a 94-Year Old Woman from Home Equity Theft

Geraldine Tyler purchased a small condo in Minnesota back in 1999. Her family decided it was safer for her to move into an assisted living community in 2010. Over five years time, she accrued $2,300 in unpaid taxes and $13,000 in interest and penalties. Hennepin County had seized her property in 2015 and sold it for $40,000, paying the outstanding $15,300 debt and pocketing the rest for themselves.

A putative class action brought up by Tyler went all the way to the Supreme Court, who unanimously ruled against this practice, stating that it violated the Takings Clause of the Fifth Amendment to the United States Constitution and was an unconstitutional taking of the homeowner’s property without just compensation. This means that the Minnesota tax officials  are out of luck and the homeowner will get to keep their home.

Read the entire brief of the 21-166 Tyler v. Hennepin County case.

Bankruptcy Law: Your Front-Line of Defense Against Deed Theft

If the tax deed purchaser has accomplished an unconstitutional taking without just compensation, it also has received a fraudulent transfer. In bankruptcy, fraudulent transfers can be avoided and the property can be restored to the homeowner. 

In such cases, Chapter 13 is an ideal remedy for the homeowner who finds themselves in debt and at the same time is facing eviction from their home because of failure to pay a minimal real estate tax bill.

How many bankruptcy lawyers do you know that are up to date with Supreme Court decisions that might affect your rights? You don’t have to worry about that here at Lakelaw, Your Financial Lifesaver. David P. Leibowitz is admitted to practice before the Supreme Court and has briefed cases that have been decided in the Supreme Court in issues affecting bankruptcy cases.

You can depend on Lakelaw to represent you fearlessly and zealously. When your house is on the line, we will do everything it takes within the bounds of the law to protect your interests.

Contact us today to schedule a free confidential consultation.