- Free Consultation: (202) 448-5136 Tap Here To Call Us
Homeowners Association Fees in Bankruptcy
Even if you file bankruptcy and surrender your home, in some cases, your homeowners association can still pursue you for unpaid dues. In Washington, D.C., Maryland and Virginia, homeowners associations have a “superpriority” for unpaid dues. Up until title to the home is actually transferred, you will still owe HOA or condo fees. So what exactly is the treatment of homeowners association fees in bankruptcy?
Homeowners Association Fees in Bankruptcy
Consider the following common scenario. You buy a home and take out a mortgage. Later, by some unfortunate set of circumstances, you lose your job or suffer a catastrophic decrease in income. No longer able to make payments on your mortgage or HOA fees, the mortgage company initiates foreclosure proceedings against you. In many cases, this process can take well over a year to complete from start to finish.
In the meantime, you declare bankruptcy to improve your lopsided debt-to-asset ratio. Unfortunately, the HOA fees will begin to accrue post-bankruptcy-filing. Until the actual foreclosure auction takes place and title transfers, you will owe those monthly HOA fees.
Discharging HOA Fees in Bankruptcy: It’s All About the Timing
Mortgage companies are still working through a tremendous backlogs on foreclosure properties. In some cases, lenders also have a perverse economic incentive to delay foreclosure in order to avoid incurring liability on HOA fees themselves. Due to mounting foreclosures, homeowners associations and condo boards face severe financial pressures of their own. As a result, in recent years HOAs have begun more aggressive collection on unpaid fees.
For this reason, unpaid HOA dues can create enormous liabilities for preforeclosure homeowners. Unpaid HOA fees incurred prior to a Chapter 7 bankruptcy filing will be discharged (that is, eliminated) by the bankruptcy. But any HOA fees that you incur after the bankruptcy filing continue to accrue to the homeowner until the foreclosure completes and title legally transfers.
If you are in foreclosure and considering letting the property go, be sure to discuss your HOA fees with your attorney. In many cases, it’s all about the timing.
They Called. They're Glad They Did.
Brian Lee from Lee Legal was an amazing attorney to work with. He took his time, reviewed my documents and we discussed my situation thoroughly. He explained the process and my options as well as gave his recommendation. Not only did he assist, but he ensured that I knew this...
Brian handled a legal matter for me and he was fantastic. He kept me informed of all updates and resolved all issues that were presented. I highly recommend Brian to all seeking legal advice and services.
I was very nervous and scared about going through this process. But Brian was very knowledgeable and helped me through it. I was notified about any and all updates to my case and he was very responsive when I had questions regarding any concerns I had. Although a bit nerve...
I've had the pleasure of working alongside Brian V. Lee for several years, and I can say without hesitation that he is one of the most knowledgeable bankruptcy attorneys in the DMV area. Brian's command of Chapter 7, 11, and 13 practice is exceptional, and his clients in the DC...
I wanted to share my sincere appreciation for Brian and the support he provided during a very difficult time for my grandmother. We were not wealthy, but Brian treated us with genuine kindness and respect, making sure we felt comfortable throughout the entire process. He took the...
Still several years from Public Service Student Loan Forgiveness and saddled with significant student loan payments in proportion to my income, I came to Lee Legal to explore the bankruptcy path. Through his counsel, Brian took the fear out of the process and helped me to...
Brian provided me with a very detailed analysis about my potential case after our first consultation. He promptly responded to all my complex questions, especially navigating student loans and some tax discussions. He is very professional and experienced at what he does, I would...
I had the opportunity to work with Brian at a time when I was challenged by a professional setback and forced with the challenge of making some very difficult legal decisions. Additionally, I worked with him again as I was dealing with some financial issues pertaining to my...
Brian has the amazing talent of taking complicated legal matters and distilling them down to seamless, frictionless resolutions. He is a phenomenal problem solver and a trusted advisor.
I came to Mr. Lee in a panic when I was experiencing health problems and the walls seemed to be closing in on me. Initially, I interviewed four attorneys seeking assistance with my situation. He was one of the most thorough and thoughtful people I’ve ever met. His kindness and...
Brian is both warm and professional. He helped me navigate a financial issue that I had not been looking forward to working on and he made the entire experience non-stressful, receiving a lot of anxiety I had around the matter. He is straight forward and a fantastic problem...
Brian is an amazing lawyer. He was referred to me by a friend who was also pleased with his work. I found him to be affordable, efficient, understanding, and easy to talk to. He really cares for his clients and is very committed to doing his best. He is very knowledgeable and...
This is your last stop in your searches for an attorney. After numerous research and interview with many lawyers, I decided to hire attorney Brian Lee. He is extremely knowledgeable, personable, attentive and diligent. He went above and beyond to file my ch 7 bankruptcy and get a...
