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Discharging Property Taxes by Filing for Bankruptcy in Oklahoma

The main goal of most bankruptcy cases is to “discharge” or eliminate the obligation to pay unpayable debts. While some debts are dischargeable in bankruptcy, others are not, which is why hiring an experienced bankruptcy attorney is imperative when filing bankruptcy in Oklahoma. Most debts are dischargeable under Chapter 7 or Chapter 13 bankruptcy in Oklahoma, but your bankruptcy lawyer can let you know which of your debts can be eliminated and which can’t, depending on your individual circumstances. If you are considering filing for bankruptcy in Oklahoma, our experienced bankruptcy attorneys at Oklahoma Legal Center can help. Contact our knowledgeable bankruptcy lawyers at Oklahoma Legal Center today and discuss which taxes you can discharge in Oklahoma bankruptcy, and whether filing for bankruptcy is the right option for you.

What is Property Tax?

Property tax is a tax imposed upon an individual because of his or her ownership of property. In Oklahoma, there are two kinds of property taxes – personal property taxes levied against business owners by local municipalities for owning personal property that is used for a business, and real estate taxes levied upon land owners by local municipalities. Regardless of which type of property tax debt you are facing, it may be dischargeable in bankruptcy if the following is true:

  • The tax was incurred before you filed for bankruptcy
  • It was last payable without penalty more than one year before you file for bankruptcy

In other words, any property taxes are dischargeable after one year from when a penalty begins to accrue, as long as the tax was incurred before your actually started bankruptcy proceedings.

Why Hiring an Experienced Bankruptcy Attorney is Important

If you are considering filing for Oklahoma bankruptcy in hopes of discharging property tax, remember that liens survive bankruptcy. This means that even if you are able to discharge the underlying tax debt, if you already have a lien against your property, the lien will not go away when you file bankruptcy. So, when you ultimately decide to sell that property, if there is extra money available, the proceeds will first go towards paying the lien. Keep in mind though, that after filing for bankruptcy, you will be able to repay the property taxes penalty- and interest-free on your own terms. And, once they are paid, the liens will be removed. Overall, discharging taxes in bankruptcy is an extremely complicated area of bankruptcy law. Before deciding to file bankruptcy in Oklahoma based on your property taxes, consult our experienced bankruptcy lawyers at Oklahoma Legal Center for legal advice.

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