Memphians Losing Homes Due to Tax Sales
Most people probably remember the eviction and foreclosure limits during COVID. Federal and local governments allowed people to stay in their homes during all the shutdowns and school closures. However, according to a recent WMC report, Memphis foreclosure from tax sales continued through the pandemic and impacted the entire city.
Here’s what happened, what tax sales might mean for you, and what to do if you can’t pay your tax debt.
The Basics: Tax Sales in Memphis
Generally speaking, state and federal regulations stopped most foreclosures during the pandemic. This meant even if you couldn’t pay your mortgage, you might be able to stay in your home.
The government made this decision because so many people lost their jobs and/or couldn’t make as much money during shutdowns. A parent working two essential jobs suddenly also had children at home who required online schooling. We all remember how difficult it was, even for people with financial stability.
But local tax debt worked a little differently than other debts during the pandemic. In Memphis, if you couldn’t pay your property taxes, Shelby County could take the house and auction it off to the highest bidder in order to get the money you owe them.
This process, called a “tax sale,” continued in Memphis throughout the pandemic and left a huge number of Memphians in a desperate situation. According to WMC, “nearly 1,700 properties were sold in Shelby County tax sales between August 2020 and February 2021,” even as moratoriums against federal eviction and foreclosure remained in place.”
That’s up to 1700 families who faced homelessness during a public health crisis.
The Impact of Tax Sales on Minority Communities in Memphis
These tax sales impacted minority and elderly homeowners the most. Tax sales during the pandemic centered around majority Black neighborhoods where 40% of people lived below the poverty line.
Of course, many other people struggled to pay their taxes during that time. However, more fortunate families had access to resources that helped them keep their homes. For example, they might have had:
- An attorney who could help them figure out their best options, including bankruptcy
- Savings and other access to money, like family or friends
- The ability to cut back in other areas to pay the debt
- The financial education to work out a debt payment plan with the county on their own
Memphis differed from other cities because it didn’t distinguish between owner-occupied homes and vacant properties. A lot of residents would be OK with the county taking back a vacant or unused home. But they might draw the line if people still live there: taking back owner-occupied properties during the pandemic risked leaving elderly and minority residents homeless.
Some other cities, including D.C., Detroit, Chicago, and New York, paused tax sales through the worst of the pandemic. Washington and Baltimore made exceptions for tax sales if the property was owner-occupied.
What You Can Do If You Can’t Pay Your Memphis Tax Debt
Fortunately in Memphis, even after they take your home, you have 6 months to recover it. That may give you time to save up enough to pay back what you owe in taxes.
To prevent the problem in the first place, many people bundle their property taxes into their mortgage. If you don’t have property taxes bundled in, talk to your mortgage lender. Covering everything in one payment helps prevent owing debts you didn’t expect—especially property taxes.
With all that said, sometimes an event happens that keeps you from paying your debts for a time, but you know if you can just get back on track, you’ll be fine. You missed a few payments, but you don’t want to lose your home over it, and you need a little help to get everything in order again.
That’s where we come in.
Chapter 13 allows you to set up a reasonable payment plan over years, so you don’t lose your home over something like an unpaid tax debt.
It’s a powerful tool that the elite use all the time, and it can help you get your life back when you need it most.
If you’re at risk of losing your home in a tax sale, contact us today to talk with an attorney for free. We’ll help you figure out all your options. Just call us today at 901-327-2100 or fill out the form below.