Tax liens and bankruptcy

[Corey H.]

For experienced tax lien investors, what percentage of your tax lien investments would you say wind up in bankruptcy? Is bankruptcy a big problem in lien investing or something that only happens rarely? When it has happened, were the debtors able to cram down your interest and if not, how did you prevent it?

[John Underwood]

@Corey H. I have only had one case of a bankruptcy and a Tax Lien.

In my case the Bankruptcy was already on going before I bought a Tax Lien at auction. The Bankruptcy attorney sent me and the county letters. The county said even in a bankruptcy the owner has to pay their property taxes so they ignored the attorney and I ended up with a deed to the house. The Owner who lost the house was so tired of all this they signed a Quit Claim Deed to me and I gave them some money to help them be able to move out and get an apartment.

This has been a great house that is now rented to a Section 8 tenant and the house has appreciated nicely as it is in an area of Downtown that is on fire with Gentrification.