HOA Fees and Bankruptcy: Are they covered?

Homeowners Association (HOA) fees are collected from residents in a residential community to assist with the upkeep and community improvements. On average they go up in cost every year and are collected monthly or yearly and could put you in financial jeopardy. Did you know you have options if you are facing foreclosure or are struggling to pay your HOA fees because of financial hardships? There are two options when filing for personal bankruptcy- Chapter 7 and Chapter 13. Each of these handles HOA fees differently. The attorneys at Gingold & Gingold, LLC, are a phone call away to assist you with any questions you may have regarding your HOA fees and bankruptcy.

What does it mean for my HOA fees if I file for Chapter 7?

According to NOLO, your HOA fees after filing for Chapter 7 bankruptcy will depend on: when you file your case, whether you give up the property, and when the foreclosure sale takes place. If you decide to give up your property, the HOA fees that you may be able to discharge are those accrued up to the date you filed for bankruptcy. Any fees accrued after the filing date will not be discharged and will be your responsibility until the bank forecloses your property. There are a couple of options to consider avoiding additional fees after your filing date- selling the property as a short-sale before filing or waiting to file bankruptcy until after your property has been foreclosed. If you decide to keep your property, you will still be responsible for paying any past and present outstanding HOA fees when you file for Chapter 7.

What does it mean for my HOA fees if I file for Chapter 13?

There are special considerations to keep in mind when it comes to HOA fees and Chapter 13. NOLO states it depends on your intention to keep or give up the property, whether you incurred the HOA fees before or after you filed, and the laws of your state and bankruptcy court. If you plan to keep your property, the HOA fee before filing must be paid. Chapter 13 may allow you to make payments on outstanding HOA fees through a bankruptcy repayment plan. Under Chapter 13, you must earn enough money to support a repayment plan that meets legal requirements.

Consulting with a bankruptcy attorney to learn how HOA fees are handled when filing for Chapter 7 or Chapter 13 is important to making the right decision for you. If you are in the Atlanta or surrounding areas, contact Gingold & Gingold, LLC, today for a free initial consultation to discuss your options.