When a taxpayer files bankruptcy and lists the Cole County Collector as a creditor, the Collector receives a notice of the bankruptcy filing from the United States Bankruptcy Court. The following apply to a taxpayer’s property taxes when he/she has filed bankruptcy:
- Bankruptcy usually impacts property taxes assessed at the time the taxpayer files bankruptcy; e.g., tax liability is assessed as of January 1, although bills are not created and payable until November.
- The Collector will file a claim for any real estate taxes, personal property taxes and/or special assessments imposed by a Levee or Neighborhood Improvement District due or assessed at the time the bankruptcy was filed.
- Property tax bills will not be mailed to a taxpayer after they have filed bankruptcy until the Collector receives notice from the court that the debtor's case has been closed.
- Property taxes are generally classified as priority claims and are normally not discharged by the Bankruptcy Court.
- Late penalties and fees do not accrue during the time the taxpayer is in bankruptcy. However, upon discharge, late penalties and fees will begin accruing and are due and payable the same as taxes as required by law.
- To renew or purchase a license plate when a taxpayer has filed bankruptcy and personal property taxes are not paid, the taxpayer may obtain a special form from the Collector. This special form will be accepted by the Department of Revenue in lieu of a personal property tax receipt.