Bankruptcu issue and Tax lien certificates

Dear All,

Could any one answer the question;

What happens to Tax lien certificate investors money,if the owner of the property file for banckruptcy(CH_7 or 13)?

Does the investor lose all his money for good? or there is a way to get the money back?

If all teh money is lost? then how and what causes the loss of money???

Can any one explain in detail?




Your tax lien certificate can not be discharged in bankruptcy as it is against property taxes and property taxes can not be discharged in bankruptcy!


Hi Thanks for the prompt response.

I want to know is there any way where a Tax Lien investor can totally lose their investment???



Your tax lien certificate shows a face value and a guaranteed interest rate, even if you hold the certificate 5 years and the Federal Government siezes the property in the eleventh hour the property tax still needs to be paid and you can't lose your money.

Now if you buy a certificate figuring you will be able to make quiet title action and get the actual property you will be sorely disapointed as at least 7 or 8 of every ten properties will catch up back taxes before they ultimately lose their property.


Most of what Gold River says I agree with. However: you can lose all of your investment in the scenario he presented.

  1. you buy the lien and the feds step in and it goes on and on and on.

  2. You fail to purchase the lien each year that it goes on.

  3. Your position wil be wiped clean by another investor who buys it and keeps it current.

  4. another case that happens from time to time is that the tax collector erronously sells the property for taxes…they will give you your money back…BUT…will NOT pay interest on it.

Bill H

We been very lucky on Tax Liens in California and Florida and only had 12 out of 20 to catch up the taxes and the others we got.


CA is NOT a tax lien state.

FL you have to foreclose after the maturity.

WOW! You Are doing GREAT…somewhere?

Real Estate Seller:


In your PM to me you changed to TX and CA.

TEXAS IS NOT a tax lien certificate state.

CALIFORNIA IS NOT a tax lien certificate state.

I am begginning to doubt your authenticity… very much.

DO YOU know what your are posting?

Real Estate Seller:

I am NOW fully convinced that you know practically NOTHING about tax lien or tax deed sales.

In you last PM to me, which you are probably too embarassed to publicly put on the board, you have changed again.

If you know anything about tax lien and tax deed sales then PLEASE explain how this happened:‘’

We been very lucky on Tax Liens in California and Florida and only had 12 out of 20 to catch up the taxes and the others we got.

In both TX and CA at the tax deed sale either you are the SUCCESSFUL BIDDER and get the tax deed or you are NOT and do not get the deed…LUCK is NOT involved.

PLEASE tell all of us how, “WE GOTTEN LUCKY?”

PLEASE no more PM’s trying to CYA.

People read and rely on the information posted here. Incorrect, false, erronous information can cause harm to investors…that is NOT what ths board is about.

PLEASE be sure the brain(?) is engaged before putting the fingers to the keyboard!