HOA Dues and Bankruptcy

If your home is in foreclosure or you cannot afford your mortgage filing bankruptcy may allow you to discharge the debt and you will not have to pay your mortgage. Of course, if you do discharge your mortgage in bankruptcy the bankruptcy trustee or bank will want your house.   When the trustee believes there is equity in the home they will auction it off and distribute any proceeds to your creditors. If there is no equity in the home (i.e. it is worth less than what you owe the bank) it is the bank’s responsibility to foreclose the property, even after bankruptcy. Until the property is foreclosed you still own it and can continue to live there “rent free,” however, if the home is subject to homeowner’s association dues you may be responsible for any charges incurred after the date you filed your bankruptcy.   Homeowners association dues incurred prior to your filing bankruptcy will be discharged along with the rest of your debt but dues incurred after you file will survive the bankruptcy and, in Florida, can be attached to both your home and you personally for as long as you own the home. When the property is foreclosed and sold the new owner typically pays off the HOA dues but they also have the right to sue you for reimbursement. So if you own a home that is subject to HOA fees it is advisable to continue to pay your dues until you no longer own the property.   If you have questions about bankruptcy or any other legal matters please contact Matthew C. Bothwell, P.A. We are here to help.