Michigan provides a variety of services for residents who find themselves behind on their property taxes. From special programs for senior citizens to installment plans to a poverty exemption, resources are available. Be advised that you'll need to be able to document your hardship, and you may be required to pay your tax bill in its entirety eventually; nevertheless, the best way to get help is to ask for it.
Financial Hardship Property Tax Exemption
Michigan's senior citizens have several tax relief programs to explore. The Financial Hardship Property Tax Exemption allows a senior who meets the federal poverty level standard to apply for a property tax exemption. Seniors must apply for relief through their town assessor; while back property taxes may not qualify for the exemption, future burdens could be relieved, which would allow the senior to cure the default over time through an installment plan. In 2011, the federal poverty standard is $10,890 in income for a single-person household (add another $3,820 for each additional person).
Another tax break for Michigan seniors is the tax deferment program. Residents who are over the age of 62 and who meet income limits of $25,000 for the previous year can defer paying property taxes for several months. This is a great program for older homeowners who aren't yet delinquent but are in danger of becoming so. Homeowners who believe they may be eligible must check with their local tax assessor to verify that the program is offered in their county -- not all Michigan counties provide this form of tax relief.
If you are delinquent on your taxes and do not qualify for any of Michigan's senior tax relief programs, contact your tax assessor immediately. While assessors much prefer to collect your taxes in a lump sum payment, you may be able to enroll in a repayment plan. The catch? You must pay your current property tax bill on time while also repaying the past due amount. The past due amount will also be subject to interest, and possibly fines. If you are able, you may be allowed to put the balance due on a credit card.
Risks of Ignoring Property Tax Bills
By far the biggest risk is foreclosure, and it's final; once your house is sold at auction, you can't get it back. Even though your mortgage is the first-position lien against your home, your property taxes will get paid even before the mortgage -- it's a priority lien. As a result, the best way to handle past-due property taxes is to reach out to your tax assessor. She would much rather arrange a repayment plan than take your home through foreclosure.
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