Can a statutory HOA lien be completely discharged with a lien avoidance motion to the court?

Asked almost 2 years ago - Walnut Creek, CA

Under Chapter 7 BK, HOA charges prior to opening case with the debtor intending to retain the property in the Statement of Intention.

Attorney answers (5)

  1. William James Waters

    Contributor Level 14

    6

    Lawyers agree

    Answered . No. An HOA lien is a voluntary lien, since you agreed to the HOA's secured status when you accepted the CC&R's when you purchased your property. That type of secured junior lien on your primary residence can only be removed in a Chapter 13 proceeding, either by motion (in some courts) or an Adversary Complaint (in some other courts). In a Chapter 7, if your are keeping the property, you cannot strip off or discharge this type of secured voluntary lien. This is no different than if you wanted to try to remove a 2nd Trust Deed from your property - you just can't do it in a Chapter 7 in California. The only HOA debt that can be discharged is pre-petition debt in a Chapter 7 or 13, when you are planning to surrender the property, but you remain liable for any post-petition HOA debts up until the point in time when you are no longer on title to the property.

    An involuntary lien, however, such as a lien recorded against the property by a judgment creditor (i.e. a credit card company that receives a default judgment against you) can be removed by motion to the extent the lien impairs your right to a claimed exemption.

  2. Brian Crozier Whitaker

    Contributor Level 17

    4

    Lawyers agree

    1

    Answered . I agree with my colleagues; but what did you mean exactly using the term "statutory" lien?
    If the HOA did not go through the process of Noticing you of intent to lien, they may not yet have a lien and the unpaid pre-petition HOA fees might be discharged (depending on your judge).

  3. Michael Raymond Daymude

    Contributor Level 20

    4

    Lawyers agree

    Answered . No.

    I am licensed in California only and my answers on Avvo assume California law. Answers provided by me are for... more
  4. Hermin A. Dowe

    Contributor Level 13

    4

    Lawyers agree

    Answered . In a Chapter 7, if you are keeping the property, you cannot strip off or discharge this type of lien. You can discharge pre-petition HOA debt in a Chapter 7 or 13, when you are planning to surrender the property. You however, remain liable for any post-petition HOA debts up until the point in time when you are no longer on title to the property.

    Remember that on this forum attorneys try to answer your questions with limited facts available to them. My... more
  5. Carl H Starrett II

    Contributor Level 16

    4

    Lawyers agree

    Answered . You cannot remove an HOA lien in a Chapter 7.

    First, the firm is a debt relief agency according to the U.S. Bankruptcy Code. We help people file for bankruptcy.... more

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