In recent months, several New York lawmakers have introduced a bill designed to provide consumer protection to those at risk of losing their homes or businesses because of tax liens. Someone who defaults on a mortgage may be able to file for Chapter 13 bankruptcy to avoid foreclosure. The recently proposed bill would provide similar protection to people facing foreclosure because of unpaid taxes.
A tax lien is a claim made by the government against a person’s property when he or she owes a substantial tax debt. A senator who sponsored the bill said that tax liens often affect people who are in dire financial straits. He said the bill is meant to help them get back on their feet and prevent investors from capitalizing off their financial crises.
Interest on tax debt cannot exceed 16% under the newly proposed law
One of the ways the bill (if signed into law) would protect commercial or residential property owners would be to place a cap on interest that can be charged against the tax debt. This limit would be 16% for delinquent taxes. The senator said predatory lenders have taken advantage of many property owners in New York. He hopes that this legislation will counteract their efforts.
Facing foreclosure is a frightening experience
When a foreclosure notice arrives in the mail, a New York property owner might immediately begin to worry. It is best to try to remain calm and explore all options available to help resolve the problem. There is no guarantee this bill will be enacted into law, but there are existing options that can be employed, which not only may help keep a home or business from being foreclosed but can also enable the property owner to restructure finances and restore solvency.