City officials in Hazard, Ky., are ramping up efforts to collect approximately $200,000 in back taxes after sending out 1,100 letters to delinquent taxpayers last week.
The goal of the program is to increase profits for the city, rectify any data errors on the tax bills and inform Hazard residents that the city’s administration is making an effort to run the city “fairly and economically."
Most people receiving the letters have been delinquent for several years. If they pay within 30 days of the date marked in the letter, they won’t be subjected to accumulated interest, prorated mailing costs and prorated attorney fees.
The city isn’t offering any sort of payment arrangements. According to Assistant City Attorney Lori Reynolds, there are two reasons for this:
1) The debts are secured by a lien on the property. The lien over the property gives no advantages to the city to accept payments.
2) It would be problematic for the city to keep up with payments, especially if the taxpayer decides not to honor the payment arrangement because the city would have to keep track of the interest, costs and fees.
The next step the city will take to collect the delinquent taxes will be a mass collection lawsuit. Reynolds expects to have the mass case filed by the summer. Under the mass collection lawsuit, the city will be able to file one lawsuit with every delinquent bill added as a separate count, making the lawsuit under one case number.
Once the lawsuit is filed, a list of the delinquent taxpayers will be published in the local newspaper, The Hazard Herald, with the cost of doing so - per city ordinance - prorated and added to the delinquent taxpayer’s debt.
Before the city would move to foreclose on any property, banks and loan companies that have mortgages or liens on the property will be notified of the lawsuit to allow them to have a chance to pay off the debt. The taxpayer, mortgage company, any lien-holder or others claiming interest in the property can pay off the tax debt during the collection process.
Reynolds hopes that the delinquent property tax collection will net at least $125,000 for the city.
Mayor Jimmy Lindon and the city have said they will try to give taxpayers enough time to pay off the delinquent tax debt before filling the mass collection lawsuit. Hazard's population is estimated at 5,500.