Home Owner’s Association Dues and Filing Personal Bankruptcy
When filing personal bankruptcy, it is important to consider the effects bankruptcy will have on you and your home. If you are behind on your mortgage payments and don’t see any hope of catching back up, you may consider walking away from your home. Without filing personal bankruptcy, this can be disastrous.
However, filing personal bankruptcy presents its own problems you may not be aware of. One of those problems is home owner’s association dues. If you file bankruptcy, do you still owe them? Will you be expected to pay them in a timely manner? Can you get in trouble if you don’t pay them? These are all questions we will address as we discuss how home owner’s association dues are affected by bankruptcy.
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Filing Personal Bankruptcy: How It Affects Your Home
As we mentioned previously, failing to file bankruptcy when you seriously behind on your mortgage payments can lead to disastrous consequences. You may face foreclosure or may even be sued by your lender for the remaining balance of your mortgage. If you do file bankruptcy, though, you are protected from these problems. Any debt you owed would be discharged in the bankruptcy case.
So, does filing personal bankruptcy offer the same protection when it comes to home owner’s association dues? Yes and no. According to the home owner’s association laws, any dues you owe prior to your bankruptcy filing date would be discharged. However, after the filing date, you are expected to keep up with your dues until the home has been foreclosed on.
This occurs whether you state in your bankruptcy case that you intend to give up the home during bankruptcy or not. From the date you file, until the home is foreclosed, you are responsible for any and all ongoing dues. It doesn’t matter if the foreclosure happens within two months after filing personal bankruptcy or two years down the road.
Filing Personal Bankruptcy – What Happens If You Don’t Pay Your Dues
If you refuse to pay your home owner’s association dues after filing personal bankruptcy, one of two things may occur.
- A home owner’s association law firm, or one similar to it, may sue you.
- The home owner’s association may sell the debt to a debt buyer, who would then take action and sue you.
Because you are filing personal bankruptcy, there is a good chance you can’t afford to be sued. If you want to avoid this, there are a few things you can do.
- Move out of the house immediately after filing personal bankruptcy. Many home owner’s association law firms will consider suing you to be impractical if you are no longer living in the home. They simply don’t want you living in a home you are not paying for.
- Include a rejected home owner’s association contract in your bankruptcy filing.
- Wait to file bankruptcy until after the foreclosure has occurred.
When it comes to your property and filing personal bankruptcy, you may still be responsible for paying your home owner’s association dues. Know the laws in your state and make sure you avoid having to pay these dues after you file.
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