CAn HOA fees be discharged through bankruptcy? 13 Answers as of January 19, 2011

If my HOA has not accepted my payments, and I have been trying to fight their erroneous fees, then a lis Pendens was filed and they say I owe their attorney fees, when it was their attorneys and management company that has been stalling racking up charges and fees for me to pay if I am not behind on my mortgage, but my condo is worth way less than I owe, Can I file Bankruptcy and walk away from all this BS I have been through with the HOA since I moved it. This company is far from being on the up and up, and If I had money I would find a good attorney to fight them but I don't. My situation is a long story, but I guess my question is Can I file BK and if I can will the HOA fees be discharged? Thank you.

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Christopher Legal Group
Christopher Legal Group | Shawn Christopher
Past due HOA fees can be discharged in bankruptcy, but if you want to keep the condo, you will most likely need to pay them. If you want to surrender the condo to your lender, then make sure to list the HOA dues/fees, and they can go away. However, depending on where you live, you might still be obligated for the HOA dues that accrue after your filing date.
Answer Applies to: Nevada
Replied: 1/19/2011
DiManna Law Office, LLC.
DiManna Law Office, LLC. | Dawn DiManna
Section 523(a)(16) of the bankruptcy law, as amended by the 2005 Bankruptcy Reform Act, makes homeowners or condominium association fees nondischargeable, but only if the association fees arose after the date the bankruptcy was filed, and only for so long as the debtor has an ownership interest, or some other equitable interest, in the property. A post-bankruptcy sale or foreclosure of the debtor's interest in the property, once fully completed, ends any further accumulation of association fees. Wait until the foreclosure happens and is finalized and then file so ALL HOA's would be discharged.
Answer Applies to: New Hampshire
Replied: 1/15/2011
Gus Johnson Attorney at Law
Gus Johnson Attorney at Law | Gus Johnson
You would expect that you can discharge the personal liability for the HOA assessments, they may remand a lien on the property.
Answer Applies to: South Dakota
Replied: 1/15/2011
Law Office of Aaron Nielson
Law Office of Aaron Nielson | Aaron Nielson
HOA fees are one of the more complicated parts of a bankruptcy. If you choose to file for bankruptcy then an attorney can probably help you with past HOA fees but you could be liable for new charges. Because it is complicated you need to talk with an attorney about the specifics and not rely on a 1 or 2 line post.
Answer Applies to: Washington
Replied: 1/14/2011
Greifendorff Law Offices, PC
Greifendorff Law Offices, PC | Christine Wilton
HOA dues are not dischargeable. They are a covenant that runs with the land and you're on the hook. Bankruptcy won't help you here. Appear on the Liz Pendens and argue that you've been trying to pay them, if you can prove it. Good Luck.
Answer Applies to: California
Replied: 1/14/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    You need to wait the file bankruptcy until after the foreclosure of the condo. By waiting, all of the HOA fees will be discharged. If you file before the foreclosure you will the owe the HOA fees from the date of filing to the foreclosure date.
    Answer Applies to: California
    Replied: 1/14/2011
    Bankruptcy Law Office of Robert Weed
    Bankruptcy Law Office of Robert Weed | Robert Weed
    They will be discharged up through the date of the bankruptcy. After that, it's an after BK debt for as long as you are still the owner. That could be a long time. The banks are slow to foreclose sometimes on the high fee condos for exactly that reason. So you want to stay in the place after the BK is filed until the condo is foreclosed. Or, get a tenant or house-sitter who will at least pay enough to cover the condo fees. Sometimes that can go on for well over a year.
    Answer Applies to: Virginia
    Replied: 1/14/2011
    Law Offices of Steven A. Wolvek
    Law Offices of Steven A. Wolvek | Steven A. Wolvek
    If you file a chapter 7 and walk away from the property, then the HOA fees would be discharged and you would have no liability.
    Answer Applies to: California
    Replied: 1/14/2011
    Law Office of Harry L Styron
    Law Office of Harry L Styron | Harry L Styron
    It depends on what Chapter you proceed under. If the Condo is entirely under water because of the higher priority financing liens, and if you choose, or are required because of your income to file, a Chapter 13 proceeding, then the HOA lien can be "lien stripped," treated as an unsecured debt, and discharged in the bankruptcy. If the Condo is not underwater, then you can't get rid of the lien. If you file Chapter 7, then the HOA lien will remain on the property, even if your equity in it is exempt, and if and when you sell the property the dues plus the interest (In California, 10%) and fees will come off the top (if there is any "top" at that time).
    Answer Applies to: California
    Replied: 1/14/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    HOA dues prior to filing are discharegable. HOA dues after filing are technically subject to collection(if the creditor is so inclined) and only while the property remains legally yours. Thank you,
    Answer Applies to: California
    Replied: 1/13/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    Based on what you are saying it sounds like the H.O. Association sued you, filed a lis pendens (which means there is a pending lawsuit involving the property), obtained a judgment against you and probably filed an Abstract of Judgment. An Abstract of Judgment creates a lien on all the property you own in the County where it was filed, including the property on which you owe the H.O. fees, for the amount of the judgment.

    You can file a Chapter 7 case and surrender the property on which you owe the H.O. fees. Your personal liability for H.O.'s judgment and any additional H.O. Association fees before you file the Chapter 7 bankruptcy case would be discharged. Therefore, the judgment would have no value and would be unenforceable since nothing would be owed after you the get the discharge. If an Abtract of Judgment was filed then you might have to file a motion in the bankruptcy case to avoid the lien created by the Abstract of Judgment because the Abstract of Judgment might cause you problems in the future if you ever buy another property although your personal liability for the judgment debt was discharged in your bankruptcy case. You need to discuss with a bankruptcy attorney if it is worth it in your situation to file the motion to avoid the lien created by the Abstract of Judgment.

    If you remain in possession of the property subject to the H.O. Association fees after filing for bankruptcy and surrendering that property in the bankruptcy petition you might be liable for H.O. fees after the bankruptcy filing date. That is an issue that is not legally clear. I believe that if you surrender the property in the bankruptcy case you would not be liable for post-filing H.O. fees even if you stay in the property but other bankruptcy lawyers may have a different opinion. The courts have decided that issue in different ways. In any case, it very likely that the H.O. Association would be paid in full by the bank before it forecloses since the lien of the H.O. Association for its fees is superior to the lien of the bank for the mortgage. In order for the bank to sell the property at the trustee's sale the amount owed to the H.O. Association lien will have to be paid. A buyer at a trustee's sale would want to obtain title to the property free of the H.O. Association lien. Therefore, generally the bank foreclosing on its mortgage pays all liens superior to its mortgage before the trustee's sale, including the liens for H.O. Association fees and unpaid property taxes. I have seen cases where the H.O. Association has been paid in full by the bank before a foreclosure and then continued to collect on the judgment against the homeowner who does not know that the bank already paid the entire debt. What happens is that the H.O. Association "forgets" to tell the collection company that they got paid in full.
    Answer Applies to: California
    Replied: 1/13/2011
    Stuart Jon Bierman  Attorney at Law
    Stuart Jon Bierman Attorney at Law | Stuart Jon Bierman
    I do not really know the answer because a few variables may be involved, but I think the answer is that there is a good chance that if you file a chapter 7 liquidation bankruptcy and surrender the condo to the lender then the HOA will not have any further claims against you. I think you would be best off discussing this with an attorney in your home state to be sure about this though, and that attorney may want to look at the contract between you and the HOA to see if there are any anti-bankruptcy provisions.
    Answer Applies to: New Jersey
    Replied: 1/13/2011
    The Law Office of Mark J. Markus
    The Law Office of Mark J. Markus | Mark Markus
    Yes, the debt can be discharged, but any lien they have against your property would remain.
    Answer Applies to: California
    Replied: 1/13/2011
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