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Am I Still Responsible for HOA Fees if I File Bankruptcy and Short Sell My Home?

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  • 07-15-2008, 12:23 PM
    magicgoof
    Am I Still Responsible for HOA Fees if I File Bankruptcy and Short Sell My Home?
    My question involves a foreclosure in the State of: California

    My wife and I own a condo in California that we currently have going through a short sale. There was an offer made and it is in the process of being approved by the lender (Countrywide). If it is not approved, we are going to do a Deed In Lieu of Foreclosure.

    In the meantime, we have been paying our HOA Fees because we didn't want to let this affect our credit more than it needs to; however, we have recently decided to file for bankruptcy as well as we are simply in that big of a hole.

    My question is, if we stopped making our HOA payments before the short sale or Deed in Lieu is finished, will the bankruptcy wipe out that debt to the HOA? Or will we still be responsible for it?

    Also of note, we are currently living in Vermont, and filing bankruptcy here since this is where we have lived for the better part of 6 months.
  • 07-18-2008, 05:43 AM
    LawResearcherMissy
    Re: Am I Still Responsible for HOA Fees if I File Bankruptcy and Short Sell My Home?
    It is my understanding that bankruptcy will not get you out of your HOA fees prior to the sale of your home.

    Double check with your bankruptcy attorney.
  • 07-18-2008, 06:14 AM
    expertlaw
    Re: Am I Still Responsible for HOA Fees if I File Bankruptcy and Short Sell My Home?
    Is there a lien from your HOA fees, or are they simply billing you? Did you declare the HOA fees as a debt you intend to discharge in your bankruptcy proceedings? If so, has your HOA disputed their dischargeability? (As LawResearcherMissy suggests, you really should discuss this with your bankruptcy lawyer.)
  • 07-18-2008, 10:14 AM
    magicgoof
    Re: Am I Still Responsible for HOA Fees if I File Bankruptcy and Short Sell My Home?
    Quote:

    Quoting expertlaw
    View Post
    Is there a lien from your HOA fees, or are they simply billing you? Did you declare the HOA fees as a debt you intend to discharge in your bankruptcy proceedings? If so, has your HOA disputed their dischargeability? (As LawResearcherMissy suggests, you really should discuss this with your bankruptcy lawyer.)

    Our condo is in the "waiting for approval from Countrywide" stage. We are not behind on our HOA fees yet. We have not yet filed for Bankruptcy.

    We decided we are GOING to file for BK and in turn have stopped paying our minimums on our credit cards. We really can't afford to pay out HOA fees either, so we have stopped paying them. (As of today though, we are not late on any HOA fees, but will be come the 1st of the month.) I estimate we will be 2 or 3 payments behind by the time the condo is sold. We will not start the BK until that point.
  • 07-25-2008, 06:27 AM
    texone
    Re: Am I Still Responsible for HOA Fees if I File Bankruptcy and Short Sell My Home?
    A word of caution to you about the bankruptcy, if you file while you're working on the short sale it will stop the process. When you file bk there's a stay placed on the property and the lender can't do anything with it until they can successfully petition to have the stay lifted. Once that stay is lifted they are FAR less likely to be agreeable to a short sale. I know this because I deal with it every single day. You have to decide which you want to do more, the bankruptcy or the short sale. You can't do both at the same time.
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