A condo owner in our building just filed Chapter 13 (he still needs to submit all the paperwork) to stop our Homeowners Association foreclosure sale. He has not paid his HOA dues for years. Our Bylaws states: the voting rights and rights to use and enjoy the Common Area of members may be suspended by action of the Board during any period when assessments owed by members remain unpaid and delinquent and for failure by members to comply with the provisions of the Bylaws.
If the homeowner is in chapter 13, you can file claim for payment of past due association in the chapter 13. Your claim will be secured claim. Homeowner will be required to maintain his association due payment from the time of filing. This may affect association right to foreclose and or suspend his right to use and enjoy common are and voting rights. This is all presuming homeowner is opting to keep the condominium and wants to continue to make payments and cure past due amounts.
Madhu Kalra Kalra Law Firm 23720 Arlington Avenue, Ste 5 Torrance, Ca 90501 (310) 325-9012
The automatic stay provisions afforded to a Chapter 13 debtor may trump adverse foreclosure action by the HoA. The Chapter 13 debtor can propose a plan to pay off his secured creditors in full and a fraction of payment to his unsecured creditors. A HoA creditor is secured by virtue of its recorded lien, assuming it has one at this point. As such, the debtor will be required by the trustee to submit a plan calling for full payment to secured creditors. Even if the Chapter 13 plan is not completed, the HoA lien will survive the 13.
Chapter 7 Bankruptcy Attorney
I agree with the other posts that you have a valid claim, that should be paid in full through the Debtor's Chapter 13 Plan. You should definitely submit a Proof of Claim verifying the amount the Debtor owes the HOA as of the date of filing, so the delinquency will be paid off in full over the course of the case. The Debtor must also begin making his/her regularly scheduled HOA payments as they come due as well to keep the bankruptcy active. If he/she falls behind again, you can file a Motion for Relief from Stay to move forward with a foreclosure.
I strongly suggest that if you are going to adversely "punish" this Debtor due to the past due while he's in a bankruptcy, then you should speak to an attorney about the specifics to ensure that your actions don't violate the automatic stay and aren't construed as an "attempt to collect a debt"....you never want to be on that end and violate bankruptcy rules.
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