PROPERTY TAX CERTIFICATE CLAIMS
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of $14,500.00 in a 60 month plan.
Below the interest bearing portion
of the claim, on a separate line, we
would include a prepetition interest,
attorney’s fees and costs section
where no interest is paid out over
the plan. As you can see, this ends
up saving the debtor a significant
amount of money.
The tax certificate holders
may argue that if paid less than the
amount allowed under state law,
they may not be required to release
the liens upon discharge. The Court
in In re Slade-Lanier, admonished
the certificate holders in response
to such an argument stating that
Creditor’s may not take actions that
violate the terms of a confirmed
plan. The Court stated that the
code allows debtors to modify the
rights of holders of allowed secured
claims. In re Slade-Lanier, 2014
WL 2565919 (Bankr. N.D.OH
2014). (Citing In re Lane, 280 F.3d
663 (6th Cir. 2002); cf In re City of
Detroit Mich., 504 B.R. 97, 150
(Bankr. E.D. Mich. 2013)(stating
that the bankruptcy Code permitted
the impairment of creditors’ state
law rights to payment even when
the Michigan Constitution provided
that the rights were not subject to
impairment). This reasoning was
affirmed in Saddler where the court
again stated that Creditors may not
take actions that violate the terms of
a confirmed plan.
SCS Credit Corp., 541 U.S. 465 (2004)
rate of interest. As an example, See,
In re Cortner, 400 B.R. 608 (Bankr.
S.D.OH, 2009).
So what is next on the
tax certificate front besides lots of
objections to existing tax certificate
claims? Perhaps a novel argument
to extend Till can be made? The
most sure fire way to make 18% tax
certificates a thing of the past though, is
to get the bar involved in attempting to
get the Ohio Revised Code and similar
other state code provisions amended.
Eighteen percent interest is simply too
onerous for people who were having a
hard time paying their property taxes in
the first place. Property tax certificates
are simply not solving the issue that
they were supposed to resolve; the
restoration of lost revenue to the
County, and a lessening of the “zombie
apocalypse.”
Unfortunately for us in
Ohio, it looks like we are stuck at
the certificate rate of interest. we
have seen several cases which
argued for and lost on the Till v.
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CONSUMER BANKRUPTCY JOURNAL
Spring 2016
National Association of Consumer Bankruptcy Attorneys