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If a homeowner has passed due HOA fees and must file for bankruptcy under chapter 7 or chapter 13, then consulting bankruptcy lawyers is important. You need to be aware of the HOA fees which will be due after the bankruptcy filing and what your responsibilities are regarding the same before and after the bankruptcy filing. This can help you determine whether you should opt for bankruptcy or not.
As per lawyers of Los Angeles based bankruptcy law firm Recovery Law Group, when an individual is behind HOA fees, they have the option of either surrendering the property or clearing the dues through a bankruptcy discharge. However, the entire HOA fees are not dischargeable, i.e. any HOA fees due prior to bankruptcy filing will be discharged but that which will be due after bankruptcy will need to be paid.
According to U.S. Bankruptcy Code 11 U.S.C. § 523(a)(16), any fee for a Homeowner’s Association that becomes due after bankruptcy will exist and the fee due prior to the filing of a bankruptcy can be discharged along with other debts of the debtor. However, many times the homeowners surrender the property in bankruptcy, or move out and assume that they aren’t responsible for HOA dues. Receiving a letter of the huge amount of pending HOA dues comes as a rude shock to them since along with HOA dues; you will also end up paying lawyer fees and late fees. A better option is to continue living there and paying the HOA fees until the property is foreclosed or some other solution comes into effect. An alternate solution is to short sell the house and move out of it.
You need to pay the HOA fees prior to bankruptcy filing if you wish to retain your home. This is essential as HOA can place a lien on your home which can later be enforced through foreclosure. As a result of this, you might end up losing your home to HOA foreclosure despite being current on your mortgage payments. Thus, HOA payments are extremely essential and should be kept in mind, especially if you are filing for bankruptcy. if you are planning to get rid of debts through bankruptcy it will be beneficial if you call at 888-297-6023 and discuss your case with experienced bankruptcy lawyers.