Tax Lien In Illinois Concering Backruptcy
If a tax buyer goes into an Illinois county tax sale and purchases certs in the upcoming Tax Sale, what happens if the homeowner throughout the redemption period files bankruptcy? Be it Chapter 13 or Chapter 7? How is the money tied up with the Cert holder? Can he go into court and get a sale in error to get the principal amount of money they put in to buy it? Or is his or her money tied up in bankrupcy court, or their certificate tied up in court? Lastly, what happens with the sub payments of the taxes? Greg 
Luckily I have not experienced this but here is what I've been told:
1) The tax cert holder must receive notice of the bankruptcy hearing.
2) Attend the hearing and represent your interest. The judge has the power to change the interest rate and under unusual circumstances the principal (along with the redemption period).
3) If you attend the hearing you will likely get all of your principal back plus some interest. If you miss the hearing your investment could be wiped-out (vacated).
4) The timing of when you will receive these funds will be determined by the court.