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Tax Sales: Right of Property Redemption Under Indiana Law and the Bankruptcy Code
Published: 2008 | Author: William J. Tucker

This paper discusses a property owner’s right of redemption at a tax sale under Indiana law and the Bankruptcy Code when an owner/debtor files for bankruptcy relief. 

 

Indiana Code § 6-1.1-24 et seq. gives the original owner of property sold at a tax sale a one year period in which that owner may exert his/her redemption power.  When an owner of such property files for bankruptcy relief, 11 U.S.C. § 108(b) extends the one year redemption period up to an additional sixty (60) days for the bankruptcy trustee.  According to the recent decisions of the Indiana Court of Appeals, both a tax sale and a county’s petition for the issuance of a tax deed are acts which are violative of the Code’s automatic stay.  These holdings represent a departure from previous Indiana case law which held that the redemption period is never further tolled by the operation of the automatic stay in the course of a bankruptcy case.  As a result of this shift in law, there is notable inconsistency between federal bankruptcy law and current Indiana state law on the issue. 



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