What Property Tax Foreclosure Is in Kentucky
When you fall behind on Kentucky property taxes, the unpaid bill becomes a certificate of delinquency. That certificate is a lien on your home under KRS Chapter 134. In Jefferson County, the 2025 tax bills became certificates of delinquency on April 16, 2026.
Interest builds at 12% per year, plus penalties and fees. The Jefferson County Attorney’s office reports that roughly 40% in added fees, interest, and penalties can attach once a certificate is created. The longer it sits, the more it costs you.
How a Tax Bill Turns Into a Lien and a Lawsuit
After the certificate is created and a short notice period passes, often about 90 days, a third-party purchaser can buy it. This happens under KRS 134.128 and 134.452. Once a third party owns the certificate, you must pay that party, and they can add substantial costs and fees of their own.
The certificate holder can then file a foreclosure action under KRS 134.546 to force a sale. There is an important local point here. A certificate generally cannot be sold to a third-party purchaser in two situations. The first is when you already have a payment plan with the County Attorney. The second is when the property is in litigation where the County Attorney is a party, such as a bankruptcy. Filing bankruptcy can put your case in that protected posture.
You can check whether a third party already bought your certificate. The Jefferson County Clerk keeps the records, and the County Attorney’s office can confirm the status. If no third party has bought it yet, you may be able to set up a payment plan with the County Attorney. That plan also helps, because a certificate generally cannot be sold while you are current on it.
What a Third-Party Purchaser Can and Cannot Charge
Once a third party owns your certificate, the cost can climb fast. State law lets them add interest and certain fees on top of the tax and the 12% already running. There are statutory limits on what they can charge, but the total still grows the longer it sits. They can also file their own foreclosure action. The faster you deal with the certificate, whether by paying it, setting up a plan, or filing bankruptcy, the less it costs you in the end.
Your Redemption Rights and the Deadlines
You have ways to save the property. Before a foreclosure sale, you can pay off the certificate of delinquency, plus the 12% interest and fees, to clear the lien. That stops the action at the source.
There is also a right of redemption after some sales. If a tax foreclosure sale under KRS 134.546 brings less than two-thirds of the property’s appraised value, you get a 6-month right to redeem under KRS 426.530. The appraisal follows KRS 426.520. If a sale has already happened, call right away, because the redemption window is short and has firm deadlines. The exact posture depends on the case, so Nick confirms the deadlines for your specific situation.
How Chapter 13 Stops the Sale and Pays the Taxes Over Time
Chapter 13 is a strong tool against a tax foreclosure. Filing triggers the automatic stay under Section 362, which stops the sale. Then the plan pays your delinquent taxes as a priority or secured claim over a period that can run up to five years.
That turns a crisis with a hard deadline into a steady monthly payment. You keep your home while you catch up the taxes through the plan. Because the County Attorney is a party in many of these cases, filing can also help shield the certificate from a third-party sale while your plan is in place.
Property Tax Foreclosure vs. Mortgage Foreclosure vs. Tax Discharge
These are three different problems. A property tax foreclosure starts with an unpaid tax bill and a certificate of delinquency. A mortgage foreclosure starts with a missed home loan payment. Discharging income taxes in bankruptcy is a separate question with its own rules. We keep these straight and point you to the right tool for the bill you actually owe.
Why Work With Nick Thompson
Nick Thompson has practiced law since 1988 and has served Kentucky clients since 1991. He holds U.S. Tax Court License #51, which is a real edge on tax-driven cases. Nick prepares every petition with you himself, and the first consultation is free.
We serve Jefferson, Oldham, Bullitt, Spencer, Nelson, and Meade counties, plus walk-in cases from Bowling Green and Owensboro. Our office is at 800 Stone Creek Parkway, Suite 6, in Louisville.
FAQ
Can Chapter 13 stop a property tax sale in Jefferson County?
Yes. Filing Chapter 13 triggers the automatic stay under Section 362, which stops the sale. The plan then pays the delinquent taxes as a priority or secured claim over up to five years. You keep the home while you catch up.
How much interest builds up on delinquent Kentucky property taxes?
Interest runs at 12% per year on a certificate of delinquency, plus penalties and fees. In Jefferson County, added fees, interest, and penalties can reach roughly 40% once the certificate is created. The cost grows the longer it stays unpaid.
How long do I have to redeem my property?
If a tax foreclosure sale brings less than two-thirds of the appraised value, you have a 6-month right of redemption under KRS 426.530. The exact deadlines depend on your case, so confirm them with Nick.
Do you help property owners in Oldham, Bullitt, or Nelson County?
Yes. We serve Jefferson, Oldham, Bullitt, Spencer, Nelson, and Meade counties. We also take walk-in cases from Bowling Green and Owensboro. Call 502-625-0905 to talk about your taxes.
Call to Action
Behind on Kentucky property taxes? Call Nick Thompson at 502-625-0905 for a free consultation in Louisville. We will explain how to stop the sale and protect your home.
Resources for Bankruptcy
Louisville Kentucky Bankruptcy Forms
Home Foreclosure after Chapter 13 Bankruptcy
How to Get Money Back from a Commissioner Foreclosure Sale
Kentucky Commissioner Foreclosure Sales Costs, Fees
Learn About Louisville Short Sales
Are you facing foreclosure? Then, you are in the right place because I am here to help you. So, contact my office right away to start the conversation. Nick C. Thompson, Bankruptcy Lawyer: 502-625-0905.