Will I Be Liable For Property Taxes if I Walk Away From my Property in Indiana?

Full Question:

We filed for Chapter 7 bankruptcy two years ago; due to my husband's extended unemployment because of the recession. The case was discharged on August 18, 2009. We had every intention of reaffirming our mortgage and signed our end of the paperwork, but someone screwed up; we don't know whether it was the attorney or the mortgage company (we suspect it was Wells Fargo, since we returned the paperwork along with the reaffirmation of our auto loan, which is now paid in full), so the mortgage was discharge with our other debt. We have continued to make payments, since that was our intention. My husband has been working for the last 18 months at a job 90 miles a way, but the housing market has been such that selling our house has not been feasible. We have tried listing it on ForSaleByOwner.com and Craig's list since we can't get enough at current market prices to afford realtor's fees, but have had no luck. Through the VA we have been able to purchase a house much closer to his job, and we are scheduled to close on that loan on August 18 of this year. My question is: Since the mortgage on this house was discharged, I know that we can walk away from it, but my concern is with property taxes. Will the state be able to come after us sometime down the road for unpaid taxes? They are current at this time.
07/09/2011   |   Category: Taxes   |   State: Indiana   |   #25161


Yes the state will come after whoever the named owner is for property taxes. If you walk away, you will still be liable for property taxes, and possibly a deficiency judgment. Any assets or wages you have could be attached to pay them. A property owner generally is liable for any property taxes due and the property is subject to a tax lien if not paid on time. Indiana allows the lender to get a deficiency judgment against the debtor is the property sells for less than the amount owed by the debtor.