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Chapter 7 or Chapter 13? (Behind on HOA Fess and received foreclosure notice)?
My friend received a foreclosure notice. She owns a condo but is behind on her Home owner Association Dues because she lost her job. So she is current on her mortgage, just behind on her Condo Fees.
I told her to file Chapter 7 not Chapter 13. Chapter 7 eliminates date while Chapter 3 is a payment plan and it allows you to save your home. But HOA fees can be eliminated threw a chapter 7 and the debt is wiped clean. It also stops the foreclosure and brings her current on her HOA fees.
On the other hand Chapter 13 is a payment plan. She would have to pay both her mortgage and Condo fees in one payment. The debt HOA past due payments so not go away like the Chapter 7. She can t afford the payments now so an increase would make it worse.
Am I advising her correctly or am I way off? She lives in Ohio if it helps
Expert Feedback would greatly be appreciated.
2 Answers
- 4 years ago
Post-Petition HOA Fees
In a Chapter 7 bankruptcy, post-petition HOA fees are not dischargeable. You would remain personally liable on post-petition HOA fees, until such time as the property is sold or transferred. However, in a Chapter 13 bankruptcy, post-petition HOA fees may be dis-chargeable, depending on the laws of your state. The HOA may still have a claim against the property.
This may make a difference to you if you retain or surrender your home in a Chapter 13.
According to the legal website POST-PETITION HOA fees are not dis-chargeable when filing a Chapter 7. Post-Petition refers to the fees that occur AFTER you file bankruptcy. Which we already knew you have to pay those. But Pre-Petition refers to the fees accumulated before filing the bankruptcy. Those should be covered. Make sure to ask the lawyer that.
I filed chapter 7 and my HOA fees were discharged. Meaning all the fees that occurred before filing were discharged. Any fees after the bankruptcy had to be paid. Now I live in a house, while she resides in a condo. I can't see why Condo Fees would be treated any differently from Home Owner Fees. They are the same, just 2 different types of properties.
I filed a chapter 7 to and all my debt was wiped except school loans and mortgage. HOA Fees were gone as well.
So my question was about Chapter 7 or Chapter 13. She is not late on her mortgage, not even 1 month late. I can't see why she would need a Chapter 13 since her mortgage isn't late. Am I missing something?
- 4 years ago
She is very sensible to stay current on her mortgage. This is the superior lien.
How bad is the HOA indebtedness? Rather than the disaster of a bankruptcy which will be on her record for a long time, what about trying to work something out directly with the Association? That way there will be no official record of a default and she will avoid the legal charges. Take a look here for the issues http://www.nolo.com/legal-encyclopedia/hoa-dues-ch...
