When you file for bankruptcy under Chapter 7, you can get rid of several debts including homeowner Association (HOA) fees. Chapter 7 bankruptcy is a great way if you wish to get rid of your home. However, says Dallas based bankruptcy law firm Recovery Law Group the HOA fees which accumulate after a bankruptcy filing cannot be discharged.
When you file for Chapter 7 bankruptcy, you are expected to sign a statement regarding your secured debts. You must inform the court as well as bankruptcy trustee whether you wish to keep your property or surrender it. If you cannot afford the property, you can surrender it in bankruptcy. Any and all debts associated with your home, including homeowner’s fees can be discharged through Chapter 7 bankruptcy.
Sometimes, debtors acquire HOA fees after they have filed for bankruptcy. In this case, they can contact HOA to negotiate a settlement of the fees or surrender the property to HOA. It is recommended that you consult experienced bankruptcy attorneys at 888-297-6023 before making any decision.
When a debtor converts their bankruptcy chapter from 7 to 13, the issue of paying accumulated homeowner’s fees during bankruptcy arises. Usually, courts allow debtors a discharge of debts that were acquired while transiting from Chapter 7 to chapter 13, if the debt would have been discharged during bankruptcy. Thus, HOA fees are generally eliminated when Chapter 7 bankruptcy is filed.
To eliminate these debts, the debtor needs to add any debts acquired in the bankruptcy forms after they had filed for chapter 13 bankruptcy. They also need to file a Statement of Intention for secured debts. Sometimes another set of schedules and forms might also be required by some courts. Generally, in the case of Chapter 13, if people wish to keep their home, they need to pay the HOA fees. If, however, circumstances change and they can no longer afford to make monthly payments as per their chapter 13 repayment plan, debtors can convert the bankruptcy from Chapter 3 to Chapter 7.