Our Feed

We are involved in our communities, our profession, and our clients' associations and activities.

How does the Township Treasurer collect personal property tax from a business in bankruptcy?

A bankruptcy proceeding occurs when an insolvent business (or individual) files a petition, which starts the bankruptcy proceeding. On the date the petition is filed, debts owed by the business are classified as pre-petition debts and post-petition debts. If personal property taxes were due before the filing, that is a pre-petition debt and should be included in the Township's claim. Post-petition debts can also be collected by filing claims during the bankruptcy proceeding. These claims are known as administrative expenses. 

Post-petition debts often include personal property taxes that will come due during the bankruptcy proceeding. The Township Treasurer can obtain a jeopardy assessment under MCL 211.691 and accelerate the date that future personal property taxes are due and become a lien.  As a lien, the claim will receive priority of payment in the bankruptcy proceeding.  While recovery is not guaranteed, it does improve the chances of payment.

Recent Articles & Announcements

  1. Zoning Litigation – Enforcemen...

    Introduction As we have explained at length in prior E-Letters, the enforcement of zoning violations is often best accomplished through the ...

    Read More
  2. Can I issue a 10-business day ex...

    Yes. MCL 15.235(2) lists the options for responding when in receipt of a request made under the FOIA. The FOIA permits a public body to resp...

    Read More
  3. FOIA Denials: Common Basis Furth...

    We have discussed the Freedom of Information Act (the “FOIA”), Act 442 of 1976, MCL 15.231 et seq., before in other e-letters, including...

    Read More
Talk to an Attorney
Request a Consultation

At Fahey Schultz Burzych Rhodes PLC, we’ve been helping municipalities, franchised businesses, employers, and more with their legal needs since 2008. We’d love to learn how we can help you, too.