Can Home Owner’s Due’s be Discharged in Bankruptcy?

When it comes to Home Owner Association (HOA) dues in a bankruptcy case they can often present challenges even for legal experts to tackle.  The topic isn’t discussed often which has led many to be misinformed. Chapter 7 bankruptcy allows a variety of debts to be eliminated, but when it comes to HOA dues it may depend on whether or not you plan to keep your property if you are seeking a discharge for past dues.

Keeping Your Home

If you plan on keeping your home it is likely you’ll be responsible for paying HOA dues. This is the same protocol for homeowners who fall behind on mortgage payments but want to keep their home. You’ll need to make payments on the mortgage to bring it current as the fees are part of the HOA terms and conditions.  As long as you own the property you’ll be responsible for dues and assessments.

So What Happens if You Don’t Intend on Keeping the Property?

Whether you decide to let it go through foreclosure or sell the home you may be eligible to eliminate past due HOA dues in bankruptcy. Keep in mind, if you plan to discharge these dues, anything that accrues after you file your petition may not get discharged. Basically, if you are still the owner of the property when you file bankruptcy anything that is due after the filing has taken place may be the responsibility of the homeowner.  To avoid foreclosure or being sued by HOA it’s best to pay your dues.

If you have any questions regarding bankruptcy we are here to help. Feel free to contact us today to set up a free consultation.