How Are HOA Fees Treated During a Bankruptcy?

Are unruly homeowner association (HOA) fees bogging you down financially? Sadly, this seems to be a common problem among homeowners, as it is estimated that an HOA or condominium association governs 80 percent of new home construction. Photo of foreclosure

Amazingly, according to MarketWatch.com, many Americans are facing these fees, which can average $300 or $400 a month for services like landscaping, grass cutting and snow removal. Because of this, many have fallen behind on HOA payments and are now facing a legal process called a “super lien.”

MarketWatch.com reports that “super liens” are often allowed by courts, giving homeowners associations the right to begin foreclosure proceedings against a property, if the homeowner is seriously delinquent on HOA fees. This has allowed some HOAs the right to jump ahead of lenders during the foreclosure process, and obtain costly court judgments.

Can I Discharge HOA Fees Through Bankruptcy?

As we reported in our blog two years ago, HOA fees can be extremely confusing during bankruptcy. Your best bet is to work with an experienced attorney if you are attempting to discharge or reduce HOA debt.

It should be noted that Chapter 7 or Chapter 13 bankruptcies can help discharge past due HOA fees, along with other debts such as medical bills and credit card debt. However, there will be issues that need to be tackled, including the fees that accumulate if you continue to live at your home and the bank has not finalized the sale of the property following a bankruptcy.

Keep in mind, HOA fees that accumulate after a bankruptcy case is filed are not dischargeable, as a homeowner’s obligation to pay them does not disappear until the deed has transferred to another owner. This is why it is important to speak to an attorney as soon as possible if your HOA fees have spiraled out of control. By acting quickly, there may be an easier way for you to reduce or eliminate your debt.

If your HOA fees are causing you financial stress, contact our Washington DC and Maryland bankruptcy lawyer today for a free consultation. You can also visit our Facebook page, our LinkedIn page, our Google+ page or our Twitter page for more information.

Speak to our attorney about how he can save your home from foreclosure.

Law Firm of Kevin D. Judd Maryland and Washington DC bankruptcy attorney

Judd’s Judgment: According to RealtyTrac, nearly 103,000 condominiums were foreclosed in 2010.

Source: http://www.marketwatch.com/story/condo-fee-foreclosures-become-headache-for-homeowners-2015-01-09