This paper discusses issues, problems and proceedings concerning tax sales in bankruptcy. Specifically, it discusses whether a debtor can extend the one year redemption period by filing a bankruptcy petition.
A purchaser at a tax sale receives a tax sale certificate, and the owner of property purchased at a tax sale has a right of redemption. The redemption period limitations are provided by state law and section 108 of the Bankruptcy Code. In general, an owner of property sold at a tax sale has the right to redeem the property for one year after the sale. If at any time during the redemption period the owner of the property files for protection under the Code, the redemption period continues, as provided for under state law, and is not tolled. The paper goes on to discuss in detail emerging case law, whether a confirmed Chapter 13 plan can modify a tax sale certificate holder’s rights, and due process issues regarding the legality of a tax sale.
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