POTENTIAL FORECLOSURE AVOIDANCE ACTIONS
There are few—if any—ways to avoid foreclosure in the event of property tax nonpayment. Failure to pay county-assessed property taxes within the mandatory time will result in foreclosure, period. For example, Michigan has strict rules for collection of delinquent property taxes, putting the responsibility for collecting back taxes in the County Treasurer’s hands. Michigan law involves a 3-year procedure that could result in property loss. Understanding the steps involved will help prevent property loss from happening. The process is as follows: • Taxpayers pay current-year property taxes to their city, village, or township. • “Delinquent” taxes are turned over to the Treasurer’s Office and a 4% fee is added, plus 1% of interest per month. • In the next year, the interest rate jumps to 1.5% per month retroactively, or 18% per year. • In the third year of the process, rights to the property can be lost and property is offered at auction to recover the taxes, fees, and interest that are owed. You can find the following tips on how to avoid property tax issues on a Michigan County Treasurer’s webpage: • If your property is your home, or principle residence, ensure you have claimed a “Principle Residence Exemption” on your income tax. • If you didn’t file an income tax return, you may be eligible for a Homestead Property Tax Credit from the state. 14
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