Legal Question in Bankruptcy in Illinois

MENSA QUESTION FOR THE LEGAL COMMUNITY. CAN ANYONE ANSWER THIS QUESTION ? I own an industrial building, My major tenant is in chapter 11, and can't pay the rent. Neither can I. The bank has started foreclosure proceedings. I owe the bank 2.2M, with outstanding real estate taxes of $ 450,000. I brought the bank a buyer for 2.1M.

Everyone is happy. However, no one wants to pay the taxes. Can I strip the taxes if I go into chapter 11/7? I have case law on both sides..some say yes, others say no. Can anyone tell me what is the law in Illinois, and the probable outcome? Or perhaps suggest how you would handle this situation? Even if you don't know the absolute answer, please give some advice on the subject. Thank you from,

Desperate in Chicago


Asked on 7/21/10, 1:55 am

2 Answers from Attorneys
Caroline Palmer Law firm of Caroline Palmer

It is my understanding that no taxes, no matter what kind of taxes, can be discharged by any bankruptcy chapter because they are government debts.

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Answered on 7/21/10, 6:30 am
Thomas Moens Moens Law Offices, Chartered

Not sure what you mean by "strip the taxes," but real estate taxes are a lien superior to any other lien. Bankruptcy will not affect that lien as to the real estate. If the taxes are not paid, the county will eventually sell the property at tax sale.

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Answered on 7/21/10, 6:31 am


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