HOA Dues in Bankruptcy: Handle With Care

Click Image for Recent Similar ArticlesJust another reason why I hate association living, Homeowners Association Dues. I know that when you're faced with either feeding your family or paying HOA dues, you'll need to feed your family. Just know that these particular fees are called covenants running with the land and are part of your obligation even after you've filed bankruptcy. 11 U.S.C. 523(a)(16) makes post-petition HOA fees nondischargeable and leaves the Debtors liable for these fees as long as they held legal, equitable, or possessory interest in the condominium. The problem with this scenario is that it provides no incentive to the lender to foreclose on the property because then they would be liable for these dues accruing. It's the perfect storm of natural disaster of legislative inequity.Never fear my precious condo owners in desperation, there is still HOPE. Quoting Aristotle, the nature of equity is the "correction of the law where, by reason of its universality, it is deficient." I hold this to mean that since the HOA and the bank choose to sit on their rights by trying to keep the homeowner liable for the accruing dues, then they consented to the remedy by their inaction. Remember that Bankruptcy Court is a court of equity, meaning they will do their best every time to balance those scales of justice.Posted By Ron Siegel Articles and information other readers found interesting:Credit Card Debt Rising Cultural Attitudes About Debt Debate Continues Car Won’t Start Because You Missed A Payment? No More Deficiency Judgments From Short Sales, But Income Taxes May Still Loom Max Gardner's Mortgage Loan Modification in a Box Program FSBO a No Go! Judicial Admissions in Your Bankruptcy Petition The LOW DOWN on low down Payments Real Estate Radio Show Archive Video Introduction to Ron Siegel Click Image Radio Show Archives