Bristol Virginia tax collections enter new phase

BRISTOL, Va. – A contracted law firm has begun collection proceedings on about $1 million in delinquent real estate taxes owed to the city – some up to 20 years in arrears.

But some residents claim they didn’t receive ample opportunity to make payment arrangements before Taxing Authority Consulting Services, the Richmond-based firm, got involved.

The firm completed mailing collection letters to everyone with unpaid bills during the past two weeks, attorney John Rife, a partner in the law firm, said Friday.

“We intend to aggressively pursue these accounts to collect what is due and owing to our client, the city of Bristol,” Rife said.

The letters – covering about 600 parcels – demand immediate payment and note that those properties could eventually be subject to a judicial sale, should efforts to recoup delinquent taxes be unsuccessful, Rife said.

The law firm also plans to publish the names of all delinquent accounts in the newspaper. In addition to any delinquent taxes, those affected will be responsible for the cost of publication, Rife said.

Should the property be sold to settle the debt, the property owner would also be liable for the cost of a title search, appraisals, fees and costs to conduct a public auction.

“We would prefer to have these accounts paid before we publish the names of the delinquent taxpayers,” Rife said.

The City Council agreed to retain the firm in April, after learning how much was owed to the cash-strapped city. Bristol is paying nothing for the service because the firm is adding a 20 percent fee to each bill.

The threat of legal action has already prompted some response, city Treasurer Angel Harris said.

“I’ve turned over the accounts to him [Rife], he’s dropped the first round of letters, he’s collected some money and is giving people the option to pay,” Harris said.

Bills range from $1 to thousands, Harris said.

However, Christina Rogers, a Twin City credit specialist, said about 20 property owners contacted her after being unsuccessful in setting up installment payments to resolve their tax bills before the attorneys got involved. In each case, Rogers said, all of her clients had less than seven business days to try and arrange installment payments, because they only received notice of that opportunity between June 25 and 28, and the deadline fell on the July 4th holiday.

“That is an extremely short time line,” Rogers said. “Creditgopher.com, [her firm], spends a lot of time interfacing for clients on demand-of-payment. In judgment items, typical turn time is 10 business days for resolve – either payment or payment arrangements. The resources for those funds becomes another layer the taxpayer has to address.”

Also at the issue’s heart is that only one notice – the final bill printed on pink paper – offered the opportunity to make installment payments, Rogers said.

“There was only one notification that opened up the suggestion that payment arrangements could be made,” Rogers said.

Harris confirmed that the final notice was the sole mention of that offer, but makes no apologies.

“The final notice went out the last full week of June. But it should not have been news to them, because we have some that owe for 20 years,” Harris said. “There are localities that don’t offer that [installment payments]. But looking and listening to the situation, I felt like that was something I needed to offer. I didn’t have to offer that.”

All of Rogers’ clients, whom she declined to name because of privacy issues, plan to pay their tax bills but sought additional time to avoid paying the 20 percent penalty.

“I have three clients with enormous bills. One has a bill for $14,000 and the house hardly values at what is owed. I have people who say they want to fix this, but they just need some help,” Rogers said.

Tax bills for the first half of 2010 were mailed in May and payments were due June 7 – because the June 5 deadline was a Saturday,  Harris said.

“For anyone who had not paid their taxes, July 6th was the cutoff date. We waited for mail to come in. I like to be nice to people, so we wanted to give them the benefit of the doubt. We have a lot of properties that are non-owner occupied or have out-of-state owners, so we waited over a week,” before turning it over to the attorney, Harris said.

A “good number” of those with delinquent bills made payment arrangements before accounts were given to the attorney, Harris said, adding that many have already fully paid their bills.

Property owners who fall behind in their installment payments also will be turned over to Rife’s firm, Harris said.

“A lot of people thought their tax payments were included in their mortgage payments. Escrow is the easiest thing to fix. If they don’t have that, hopefully they can refinance their home, get enough equity out to pay their delinquent bill and get the [future] payment put into an escrow,” Harris said.

Rogers said some of her clients are taking out loans to settle their debts.

“I am addressing their [client] needs to go ahead and get them refinanced and addressing credit needs to refinance,” Rogers said. “All the people who have come to see me about this are not in a situation to get a mortgage, because it would be viewed as a bailout. In FHA’s [Federal Housing Administration] eyes, the tax delinquency poses a problem for the borrower.”

Harris said her office has received few complaints about the process.

dmcgee@bristolnews.com | (276) 645-2532