Philadelphia Chapter 13 Bankruptcy Filing Allows Homeowners to Recover Home Lost At a Philadelphia Real Estate Tax Sale

  • David M. Offen,
  •   Tax Sale
  •   Comments Off on Philadelphia Chapter 13 Bankruptcy Filing Allows Homeowners to Recover Home Lost At a Philadelphia Real Estate Tax Sale

In three different bankruptcy cases filed in Philadelphia in the United States Bankruptcy Court for the Eastern District of Pennsylvania, the Bankruptcy Court has allowed the homeowner the ability to recover their home if it was lost at a tax sale. The prevailing Pennsylvania law has permitted a homeowner of a property located in the City of Philadelphia who resides in the property to redeem the property within nine months of the date of the sale by paying off the purchase price, plus 10% plus other expenses. What the bankruptcy court has done is extended the period allowed for the redemption to a period of five years.

In the case of In Re Terry, The Honorable Magdeline D. Coleman permitted a debtor to redeem a home lost at a real estate tax sale in Philadelphia by filing a bankruptcy within nine months of the date of the sale. Thereafter The Honorable Ashely M. Chan and The Honorable Eric L. Frank, Chief Judge also permitted the homeowners to recover their property by filing a Chapter 13 Bankruptcy case within nine months of the date of the Tax Sale in Philadelphia. The debtor is permitted to propose a Chapter 13 plan which will redeem the property by paying off the purchase price plus 10% and other expenses within a period of five years.

The wonderful advantage of these decisions of the Bankruptcy Court is to allow someone who does not have the funds to redeem the property within nine months to now get up to five years by using the Chapter 13 filing to redeem the property. The purpose of these decisions is to protect the homeowners from the loss of their property. These cases are another great example of the Bankruptcy Code being used to interpret State law to help people. If a property has been sold at a real estate tax sale in Philadelphia and the property has not yet been redeemed, you should quickly give our office a call at (215) 625-9600 to go over your options.

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