Chapter 13 Bankruptcy: What About Your Homeowner's Association Fees?
One debt you might not consider when you file for a Chapter 13 bankruptcy is your homeowner's association fees. The court does consider those fees though. Before you file for bankruptcy, it is important you understand how your HOA fees are viewed and what you can do about them.
Fees Before Filing
How your HOA fees are viewed by the court depends largely on whether or not you are planning to keep your home. If you are keeping your home, the fees can be added into your Chapter 13 repayment plan. When you make payments to the bankruptcy trustee, the HOA will receive payments just like your other creditors.
If you are giving up your home, the fees would be discharged when your Chapter 13 filing is completed within the courts. You will not be responsible for them once the discharge occurs.
Fees After Filing
Your HOA fees that accumulate after you file for Chapter 13 bankruptcy could possibly be discharged under certain circumstances. Again, whether or not you are keeping your home plays a role.
If you keep the home, continue to pay your HOA fees to avoid getting further behind. If you do fall behind, the court might decide to treat the arrears as part of your initial claim, since you are keeping possession of the home. If the court does, the debts could be discharged or simply factored into your repayment plan.
When you opt to give up your home, there is a chance that the court gives the HOA permission to keep an interest in your home. The HOA would have a lien against your home until you pay off your fees.
There is a possibility that the court will discharge the fees. If the court does not, you will continue to be responsible for paying them off until the home is sold.
The HOA could ask the court to order you to pay additional fees. Those fees could include its attorney fees that are related to pursuing fees from you. Whether or not you will have to pay the additional fees is up to the court. Some courts view those fees as unfair, while others see them as fair. If you are working with a local attorney to file your bankruptcy, he or she can educate you on the normal procedures of the local court.
Filing for a Chapter 13 bankruptcy is difficult, and the process of handling HOA fees can make it even more so. Your attorney, such as from Metropolitan Lawyer Referral Service Inc., can help you understand how the local laws apply to your filing and advise you what actions to take.