Tax Ease Funding, L.P. v. Thompson

REAVLEY, Circuit Judge:

In this case, we must consider whether a third-party lender who pays a debtor’s ad valorem taxes and receives a transfer of the local taxing authority’s tax lien under Texas law holds a tax claim protected from modification by 11 U.S.C. § 511 of the Bankruptcy Code. We conclude that the third-party lender’s claim is a tax claim, and that the interest rate due thereon may not be modified by a debtor’s Chapter 13 reorganization plan. We therefore AFFIRM the district court’s judgment.

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Glenn and Elizabeth Thompson owed ad valorem property taxes on their home in Humble,…