Sample Tax Lien Collection Fee Schedule: Sherrow & Sutherland Associates

Here is the fee schedule Sherrow and Sutherland uses in their collection efforts. Please read the last sentence. Always read the fine print.

Property Tax Lien Profile: Jeffersontown , KY

Property Location: Jeffersontown, Kentucky

Tax Lien Purchase:   Tax Ease Lien

Tax Lien Investors' Attorney:   Sherrow & Sutherland and Associates PSC.

Billy Sherrow, Charles Sutherland, Ryan Schwartz, Stephen Marshall

Tax Lien Year: 2009

Tax Lien Face Value:      $342.29
Documentation Fees:       $100

Interest Charges:             $44.46

Attorney Fees:                  $318  (This number grew to more than couple thousands)

Collection Phase:             Litigation

Laws Broken:                   Seperate fees were charged for same property and several other properties owned by the same owner. KRS. prevents multiple charges fro the same property and/or property owner. fee caps are for all properties not for each case. Tax Ease lien is now trying to steal a property for nothing by litigation tiny defaulted tax liens.

Tax Lien Profiles: Harrodsburg, KENTUCKY

Property Location: Harrodsbrug, Kentucky

Tax Lien Purchase:   Janus Fund

Tax Lien Investors' Attorney:   

Tax Lien Year:

Tax Lien Face Value:

Documentation Fees:

Interest Charges:

Attorney Fees:

Collection Phase:

Laws Broken:

A Tale of two Property Tax Liens

In this article we will dissect a particular law firms collection practices to demonstrate how they rob people from their houses. This is a direct insult to American dream perpetuated by big greedy investment companies and their rouge attorneys. While documents used in this post are original, identities of the properties are omitted due to privacy concerns.

Property #1

Property Description:              Empty Lot
Face Value of Property Tax:
Fees  
     


Year of unpaid Property Tax:     
Stage of collection:           PreLitigation
Third Party Investor:     Tax Ease Liens LLC.
                     Owner/Investor:              Phil Migicovsky
                     Collection Law Firm:
                     Collection Attorney:     

Property #2

Property Description: Farm House with acreage
Face Value of Property Tax:
Fees  
     



Year of unpaid Property Tax:     
Stage of collection:           PreLitigation
                        Third Party Investor:     Tax Ease Liens LLC.
                        Owner/Investor:              Phil Migicovsky
                        Collection Law Firm:
                        Collection Attorney:

      As you will recognize investor and the law firm are the same. So it will be fair to compare these two liens and see if their attorneys follow the state law. Reasonable attorney fees would mean they should charge the same attorney fees for a tax lien which was purchased at the same time instead of the maximum amount allowable by law. State laws intention was not to set the attorney fees but the set the caps to prevent abuse. If a law firm charges the maximum allowed for given lien regardless of the duration of ownership, it cease to be reasonable and becomes discriminatory and fraudulent.

Being Foreclosed due to a $300 property Tax Lien?

Per Laws Regulating the Property Tax lien Collections, pre litigation fees are very well defined. Unfortunately, I cannot state the same thing about the litigation fees. It will be more common see many new foreclosures since litigation is much more profitable instead of watchful waiting. I personally expect $3000-$4000 in legal fees just to be able to collect a $200 lien at its face value. However we will still encounter bad players (Attorneys) who would try to extract more than they should from less informed public.
    Laws regulating property tax liens are very concise so if a attorney breaks the law, does it willingly due to greed. Our other argument is we strongly believe that most attorney fees are being funneled into the coffers of the original investor. This is the only reason a company called "Tax Ease Liens" will have a dedicated lobbyist in Frankfort, Kentucky in addition to hiring another big name lobbying firm.
    Our goal to use the public resources available to us such as IRS, Kentucky Bar Association and Attorney generals office to stop these illegal acts.
   

Kentucky Laws Regulating Third Party Buyers

Here are the existing Kentucky state laws that regulates Property Tax lien industry. 

Per KRS 134.452 (Kentucky Revised Statues) Third-party purchaser of certificate of delinquency -- Fees -- Collection limitations -- Notice to proper owner.

Notwithstanding any other provisions of this chapter, a third-party purchaser of a certificate of delinquency shall be entitled to collect only the following:

(1) The amount actually paid for the certificate of delinquency;
(2) Interest as provided in KRS 134.125, calculated on the amount actually paid to the county clerk from the date the certificate of delinquency was purchased until paid; and
(3) Attorneys' fees as provided in this subsection.
(a) Attorneys' fees incurred for collection efforts prior to litigation as follows:
1. If the amount paid for a certificate of delinquency is between five dollars ($5) and three hundred fifty dollars ($350), actual reasonable fees incurred up to one hundred percent (100%) of the amount of the certificate of delinquency, not to exceed three hundred fifty dollars ($350);
2. If the amount paid for a certificate of delinquency is between three hundred fifty-one dollars ($351) and seven hundred dollars ($700), actual reasonable fees incurred up to eighty percent (80%) of the amount of the certificate of delinquency, not to exceed five hundred sixty dollars ($560); and
3. If the amount paid for a certificate of delinquency is above seven hundred one dollars ($701), actual reasonable fees incurred up to seventy percent (70%) of the amount of the certificate of delinquency, not to exceed seven hundred dollars ($700).
(b) If a third-party purchaser is the owner of more than one (1) certificate of delinquency against the same taxpayer, actual and reasonable prelitigation attorneys' fees for all certificates of delinquency against the same taxpayer shall not exceed one and one-half (1.5) times the maximum amount permitted in paragraph (a) of this subsection for the largest tax bill owed by the taxpayer.
(c) In addition to the prelitigation attorneys' fees established by paragraphs (a) and (b) of this subsection, a third-party purchaser may collect actual, reasonable attorneys' fees and costs that arise due to the prosecution of collection remedies or the protection of a certificate of delinquency that is involved in litigation; and
(4) Administrative fees incurred for preparing, recording, and releasing an assignment of the certificate of delinquency in the county clerk's office, not to exceed one hundred dollars ($100).

United We Stand, Divided We Fall

          As the citizens of my beloved Kentucky might know, the title of this post is actually our state motto. A very meaningful statement for a state which was a unforgiving frontier for new settlers such as Daniel Boone.During difficult time,  many people get in to a situation and feel helpless. Many people who receive their property Tax Collection Letter from an attorney, their first reaction would be disbelief. How a couple hundred dollar tax bill can miraculously become a $1000-2000 liability.  
            If unpaid, they state that they can foreclose on your property. Just a reminder for my readers, I am not an anarchist. I strongly believe property taxes are essential to our communities to function, but using it as a novel way to steal people's houses via foreclosure nor extortion of huge sums is completely unacceptable. There are many ways you can fight these guys. Lets discuss your options

      1- Complain to Attorney General's Office (I successfully used this approach): I can help you to draft a letter for this. But keep in mind, Mr. Jack Conway (Kentucky Attorney General) received political donations from "Tax Ease Liens". I hope he will be fair with his decision.

     2- Start a Class Action Lawsuit.  I believe  attorneys violated some of the Kentucky State Laws in their collection attempts for Property Tax Liens. If they knowingly inflated their attorney fees and overcharged beyond allowable limits stated in state laws, they should pay for damages. This will be the ideal solution and stopped them for good. This might receive some political backlash since property Tax Lien investors are the biggest spenders in Frankfort Kentucky. Business is so lucrative that, they sent one of their top employee to Kentucky, Trey Gulledge, to lobby for the company.

3-  Complain to the Kentucky Bar Association to disbar the involved Attorneys: This will be the most effective approach. Since if we can prevent certain attorneys (the ones that break the law) to take these cases, we can open the field to the ethical attorneys.