by On August 20, 2025, the National Consumer Bankruptcy Rights Center (NCBRC), together with Legal Aid Chicago, filed an amicus curiae brief in the Seventh Circuit in support of debtor–appellant Bernardo Romero. The case raises a recurring and important issue for homeowners who seek Chapter 13 relief to save their homes from tax purchasers.
Background
Mr. Romero filed Chapter 13 bankruptcy shortly before the expiration of the redemption period on his Cook County property taxes. Under the Seventh Circuit Court’s earlier decision in In re LaMont, 740 F.3d 397 (7th Cir. 2014), Romero’s filing transformed the tax purchaser’s rights into a claim that can be paid through a Chapter 13 plan rather than resulting in automatic loss of the home.
The dispute in Romero’s case centers on what interest rate applies to the tax purchaser’s claim. The bankruptcy court applied an 18% rate by borrowing from section 21-15 of the Illinois Property Tax Code, which, by its terms, governs only counties. Romero appealed, arguing that under the Bankruptcy Code and the U.S. Supreme Court’s decision in Till v. SCS Credit Corp., 541 U.S. 465 (2004), the proper rate must be determined under the federal “prime-plus” approach, not by importing an unrelated state penalty rate.
The Amicus Brief
The amicus brief was written by NACBA member David Yen.
The brief emphasizes that:
- Tax purchaser claims are not “tax claims” under Section 511(a) of the Bankruptcy Code.
Once sold to a third-party investor, the state’s tax lien is extinguished. The resulting claim is not a tax claim but rather a private lien right. Thus, the bankruptcy court erred in treating Section 511(a) as controlling. - The correct framework is Till, not Section 511(a).
The Supreme Court in Till established that secured creditors in Chapter 13 must receive interest based on a market-based prime rate plus a modest risk adjustment. This ensures debtors can propose feasible plans while still protecting creditors’ rights.
Broader Impact
The Seventh Circuit’s decision will resolve conflicting rulings among Illinois bankruptcy courts and will have profound consequences for homeowners across the state. As amici explain, “the ability to confirm a Chapter 13 plan and save one’s home often hinges on the difference between using an appropriate interest rate, as set forth by the United States Supreme Court in Till v. SCS Credit Corp., 541 U.S. 465 (2004), rather than using a punishing rate like the Illinois tax delinquency rate of 18%.”
Conclusion
By joining with Chicago Legal Aid, NCBRC seeks to ensure that the Seventh Circuit applies bankruptcy law in a manner that preserves debtors’ opportunity to reorganize and protect their homes. The amicus brief urges the Court to reverse the bankruptcy court’s ruling and to hold that Till governs the interest rate on tax purchaser claims in Chapter 13 cases.