What to Do During a Property Tax Collection Lawsuit in Texas
Are you currently facing a property tax collection lawsuit in Texas? You’re not alone. Texas has some of the highest property tax rates in the nation, and following recent financial uncertainty, many homeowners and business owners are struggling to keep up. Unfortunately, once you miss the delinquency date established by your county’s appraisal district or appraisal review board, your tax obligation becomes classified as delinquent—triggering a chain of escalating legal and financial consequences.
Why Property Tax Lawsuits Happen
When property taxes remain unpaid, your tax assessor-collector or their contracted collection law firm may file a lawsuit to recover the delinquent balance. The taxing entity typically sues for a full financial judgment, which includes:
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The original delinquent taxes
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Penalties and interest
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Collection law firm fees
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Court costs, abstract fees, and attorneys’ fees
For many property owners, especially those already under financial stress, these cumulative charges can feel overwhelming. Understanding the penalties associated with delinquent property taxes in Texas is essential to recognizing the urgency of your situation— and knowing what action to take.
What You Should Do Immediately
If your local tax authority has initiated a lawsuit against you, here’s what we recommend:
Stay Calm
Receiving a legal notice from an attorney can be stressful, but it doesn’t mean you’re going to lose your home. In most cases, the initial notice is a final warning — and there’s still time to apply for a property tax loan or explore exemptions that may halt further legal action.
Know Your Rights
If you disagree with your property’s appraised value, you can still challenge it by filing a dispute with your county appraisal district. But remember — once a lawsuit has been filed, it’s typically too late to claim overvaluation as a legal defensce.
Respond Quickly
Texas law requires you to respond to a lawsuit within a specific timeframe. If you fail to act, the district court may issue a default judgment, which can include court fees, penalties, and foreclosure risk. Prompt communication can help you avoid costly escalation and preserve your rights.
Understand the Legal Process
Unlike other lawsuits, there’s no partial forgiveness in a property tax case. The law allows full enforcement of all taxes and fees owed — and your property may be sold at a public foreclosure sale to recover those funds.
Pay the Tax Debt as Soon as Possible
The sooner you settle the outstanding balance, the better. If you’re unable to pay in full, AFIC offers fast, compliant property tax loans to help you resolve your debt and avoid legal consequences — with no credit check and a fully online process.
Claiming you “didn’t receive your bill” will not exempt you from liability. According to the Texas Property Tax Code, a tax lien automatically attaches to your property on January 1 each year. That lien gives taxing authorities the right to enforce payment, and you remain personally liable until the full amount is resolved.
When a delinquent property faces a Texas property tax lawsuit, it is crucial for homeowners to take action immediately. Missing the delinquency date can lead to significant additional costs, such as penalties, interest, and legal fees. A property tax lender can offer relief by providing financial assistance to help pay off overdue taxes before further action is taken. Since taxes are subject to strict deadlines and legal repercussions in Texas, securing help early can prevent foreclosure and minimize the financial burden.
Keep in mind that saying, “I did not receive my bill or tax statement,” is not an excuse. You will still be liable to pay your tax as well as any interest or penalties that have been accrued. In order to secure the payment of taxes on January 1, a tax lien is placed on all properties subject to taxes. Until the property taxes are paid, a lien exists in favor of the taxing unit or units responsible for taxation. On January 1, the property tax code places personal liability for the taxes on the owner of the property.
Can You Use a Property Tax Defense in Court?
If you’re facing a property tax lawsuit, you may wonder if you can challenge the claim in district court. In most cases, tax authorities act as the plaintiff, seeking a judgment for taxes owed, penalties, and legal fees. Unlike other disputes, Texas law provides limited defenses once a lawsuit has been filed, but certain situations may allow a homeowner to contest the case.
One potential defense is proving that the property has been overvalued due to an incorrect property assessment. If the assessed value was inflated, your tax bill may be unfairly high. To challenge this, you must provide evidence that supports your claim, such as sales data on comparable properties or an independent appraiser’s report.
Procedural errors can also be a factor. If the taxing entity failed to follow legal requirements—such as issuing proper notice or exceeding the statute of limitations— you might have grounds for dismissal. In some cases, alternative dispute resolution methods like arbitration may be an option. Since property tax litigation follows strict court rules, consulting an expert with legal knowledge is advisable to determine the best course of action.
How to Respond to a Property Tax Lawsuit
When faced with a property tax lawsuit in Texas, it’s critical to take immediate action to protect your property and financial stability. If you’ve been sued for delinquent property taxes, the first step is to carefully review the lawsuit notice and understand the details of the claim, including the amount owed and any associated penalties. If you believe your property has been overvalued, you may be able to file a notice with the assessor’s office to dispute the tax assessment before the case progresses.
Providing data on comparable properties can help support your claim. Respond promptly within the legal timeframe to avoid default judgments, which can escalate costs and risks. Explore options like contacting tax lenders who specialize in assisting homeowners behind on property taxes. These lenders often provide flexible repayment plans and do not require perfect credit, making them a practical solution to help you pay your property taxes and avoid foreclosure. Proactive communication with the taxing authority or a legal advisor can also help resolve the issue efficiently while minimizing additional legal and financial burdens.
Your Legal Rights as a Texas Property Owner
As a property owner who appeals an appraisal or faces litigation, it’s critical to understand the rights granted to you under the Texas Property Tax Code. The property owner may protest the order of the appraisal review if it is done before the deadlines set out in the code. However, once a judgment is sought, these avenues may no longer apply. Key rights include:
- The right to receive notice of your appraisal and protest deadlines
- The right to present evidence to the appraisal review board
- The ability to appeal an order of the appraisal review through the district court
AFIC’s role is to help you avoid ever reaching this point. By intervening early with financing tailored to your circumstances, we reduce legal exposure and preserve your right to keep your home or business.
Partnering with a Property Tax Loan Compan Like AFIC
When you fall behind on paying your personal property taxes, you’ll also incur expensive penalties, late fees, and other associated costs. These costs can add up very quickly, and if you’re not careful, you can easily end up in a financial hole that is very difficult to dig your way out of. Partner with a trusted property tax loan company that can help you get back on track. For those looking to understand how property taxes are managed during a real estate transaction, learn more about property taxes collected at closing in Texas.
A trusted tax loan provider like American Finance & Investment Company, Inc. (AFIC) will work with you to create a solution tailored to your unique circumstances and budget. Property tax collection lawsuits can be costly, stressful, and often feel relentless —and in the end, you may not get the outcome you hoped for.
We offer our clients an affordable, hassle-free way to ensure that your account with the local government tax office is paid in full and will work out an easy repayment plan for you. AFIC can provide you with an instant quote within a minute by completing the form on our homepage. For qualifying properties, we can help you pay off your delinquent taxes and offer you the following benefits:
- Quick and completely online process
- No money down
- No credit check
- Free 30-day rate match
- Match competitors and beat their rate by 1%
- Avoid high penalties and tax foreclosure sales
We pride ourselves on finding solutions to suit the unique needs of our clients. If you would like to discuss our property tax loans, please contact our experienced team at AFIC today.
