‘Bankruptcy abuse’ stalls property sales

Wayne County’s commissioners are wrestling with how to stop some residents from using bankruptcy proceedings to halt the deed sale of properties.

The pattern of behavior, which county attorney Ron Cross described as “bankruptcy abuse,” was discussed at the group’s Nov. 12 meeting.

If a property owner becomes severely delinquent on property taxes, their property might end up in a county tax sale. If it doesn’t sell, or is transferred to the county, it enters a redemption period before moving on to a deed sale.

If the owner files bankruptcy in between the tax sale and deed sale, federal law prohibits the county from taking further action to sell the property, and they might even have to refund deed sale purchasers.

The property owner might be required to file a plan to repay the delinquent taxes, but if the plan fails, the bankruptcy case can be dismissed.

However, that series of events effectively resets the property sale process, and then it must go back through a tax sale process the following year. This cycle can allow a property owner to prevent the county from disposing of the property year after year.

Cross said that proving the abuse in court would be difficult and likely not worth the legal costs involved. He suggested that there might be a way to use quitclaim deeds to expedite the sale process in some cases without triggering the redemption period. The county will continue to explore options.

Two unnamed property owners were cited as current concerns in scheduling sales for 2026.

In other business

Commissioners conducted a variety of other business during the meeting, which included reports from department heads:

• Brandon Sanders, the county’s engineer, reminded commissioners that Washington Road was expected to close at I-70 last week or this week and remain closed through May 2026.
• Craig Eason, county IT director, gave updates on various hardware and networking updates and replacement projects. He apologized for a recent change that set the automatic locking timeout on county Windows computers to a lightning-fast 2-minute period, and said it would soon be updated to more like 15 or 30 minutes.
• Veterans Affairs service officer Michele Padgette reported a successful parade and said the recent food pantry food distribution at Glen Miller Park, in partnership with Circle U, saw 90 boxes of food claimed in just 20 minutes. She said people were lined up hours before the event started. Padgette also reminded commissioners of the Dec. 6 Veterans Holiday Dinner at the Kuhlman Center, where reservations are required by Nov. 18. For more information, call Lisa Creech at 765-914-7367.
• Beth Newton, the Wayne County Health Department’s deputy director of clinical services, said the recent hiring of a new physician’s assistant meant the department is able to ramp up its offerings again, including additional exams, testing, physicals and treatments.
• County emergency management director Matthew Cain said their recent efforts to hire a communications specialist yielded 60 applicants, and so he’s hopeful about bringing someone on board soon.
• Work continues to expand and update the county fairgrounds parking lot, including moving electric utility lines.
• A Waterfall Road bridge project that depended on state funding will be moved to July 2028 instead of happening in the months ahead. Following the state’s preferred schedule keeps $3 million of funding intact.
• Commissioners continue to work toward a rebid of the courthouse elevator project.