Many individuals, mostly in the city of Detroit, have found themselves behind on property taxes owed to the Wayne County Treasurer and face the risk of losing their home.
Timeline
-A city tax bill is sent out to the homeowner in both July and December for both Summer and Winter taxes. Property taxes are assessed based on the property’s State Equalized Value on their tax bill.
-In March of the following year, the taxes are moved to the County Treasurer. An administration fee of 4% is assessed along with an additional 1% per month interest as long as the taxes are unpaid.
– In October a $15 fee is applied to the parcel.
– In March of the second year, the property is deemed forfeited. Fees of $201 are assessed and intereste jumps from 1% to 1.5% per month.
– In November of the second year, the properties are listed as subject to foreclosure the following March.
– In March of the third year, the court enters a judgment of foreclosure. Property owners have one month to redeem.
– In April of the third year, the property is foreclosed and title is passed to the Treasurer and sold in the fall at auction.
Solutions
The Treasurer is always willing to enter into a payment plan with owners. The plan usually requires a certain amount down along with a monthly payment obligation. The standard payment arrangement is providing a lump sum of 60% for all foreclosed taxes (currently 2013 and earlier) and a monthly payment agreement to pay off the remainder in a reasonable period of time. The Treasurer provides a form for the stipulated payment agreement. We highly encourage our clients to explore this avenue first. Call (313) 224-5990 or visit 400 Monroe, 5th Floor, Detroit, MI 48226. Although very busy, the staff is friendly and accommodating.
The Treasurer also provides a hardship option for those going through financial distress allowing for an extension.
If the Treasurer’s payment plan is too steep, a home owner can file a Chapter 13 Bankruptcy to pay off the taxes over the course of a 5 year plan. They may be able to reduce the amount of taxes if the value of the home is less than the taxes owe.
Appealing the property tax bill is also a consideration. Wayne County Treasurer assesses taxes based on the State Equalized Value that was issued years ago when the values of properties were much higher. As a result, the homes are worth much less than what they are being taxed on. The ACLU and NAACP have filed a lawsuit against Wayne County Treasurer asserting that the Treasurer has violated federal law with inflated tax assessments.
Step Forward Michigan has offered programs to help pay down delinquent taxes if certain qualifications are met.
Our office deals with property tax issues daily. If you need advice on how to handle past due property taxes or are at risk of foreclosure, contact an experienced debt professional at 248-237-7979.