Person was out of work going through divorce filed Chap 7 to dismiss debts and judgments against him. Three months later bank and HOA are trying to get final judgment of foreclosure on his homestead. His circumstances have changed he can deal with the bank to work a repayment solution don't want to lose his home, his property is worth less than the mortgage (it is upside down) bank and HOA refuse to cooperate can he file a chap 13 reorganization and force the bank/HOA to negotiate a plan for repayment? Can the HOA lien/complaint be dismissed since property is upside down?
Assuming this person otherwise meets the eligibility requirements for filing Chapter 13 and has sufficient income to support the required plan payments, they can file now. If it has been less than 4 years since their previous Chapter 7 filing, they won't receive a discharge of any new debt but they can get a lengthy period of time (up to 5 years) to pay the HOA dues. We call a Chapter 13 case filed within 4 years of a prior Chapter 7 case a "Chapter 20".
If the HOA lien is entirely underwater then whether or not you can remove that lien in a Chapter 13 case where there is no discharge available (because prior Chapter 7 filed within 4 years) will depend on whether your jurisdiction allows liens to be avoided in Chapter 20 cases. This is allowed in my jurisdiction but not in some other jurisdictions. However, as a practical matter, if there are new HOA dues owing that were not discharged in the prior Chapter 7, they will not be discharged in a Chapter 20 (because the Chapter 13 was filed within 4 years of a prior Chapter 7) and so, to the extent they are not paid in full through the Chapter 13 plan, they will remain owing when the plan is finished.
If it has been 4 years since the Chapter 7 filing, then this person would be entitled to a discharge in a new Chapter 13 case and depending on the circumstances may be able to pay less than the full amount of HOA dues owed, as well as remove an entirely underwater HOA lien.
The information provided herein is general information only and not legal advice. The information provided herein does not create an attorney client relationship and is not a substitute for having a consultation with an attorney. It is important to have a consultation with an attorney as the information provided in this forum is limited and cannot possibly cover all potential issues in a given situation.
Chapter 7 Bankruptcy Attorney
Easy question first, the HOA does not have dismiss the complaint just because the property is upside down. Also fairly easy - a person who got a discharge under 7 can file a Chapter 13 afterwards. Now it is time to go see an attorney - you can get a discharge under Chapter 13 if more than four years has passed from the filing date of the Chapter 7 to the filing date of the Chapter 13. You can also file a Chapter 13 if fewer than four years have passed, no discharge, but maybe you don't need one. Maybe you just need a chance to cure the default. If there is an HOA involved - well, like I suggested, go find a lawyer and make an appointment today to review this with them in person. This web site has a "find an attorney" feature.
I am not your attorney unless you and I have signed a retainer agreement. What I am saying is not legal advice. Do not act on this information without engaging my services, this is for consideration only.
A Chapter 13 can be filed after the Chapter 7 discharge is received. Debts must be repaid at 100% since no discharge is issued but since the only debt being repaid is the mortgage, that is not an issue.
The Chapter 13 cannot change the current monthly mortgage payment. The Chapter 13 plan payments would be used to repay the past due mortgage, late charges, attorneys fees and foreclosure costs. The payments can be spread out up to five years. In order for a plan to be approved, there must be enough income to cover all monthly living expenses including paying the current mortgage payments as they come due after the filing of the Chapter 13.
Please be advised that the advice to you herein does NOT establish an attorney client relationship and that our firm does NOT represent you in any Bankruptcy matter.
As others have stated, it depends on how much time has passed since the Chapter 7 discharge if you hope to discharge the debt due the association and part of what is due the bank. Yet, you can file Chapter 13 regardless if the intent is to save the home. You may not be able to discharge debt with the Chapter 13 plan, but you can still lien strip and possibly save the home. Don't delay. See bankruptcy counsel immediately.
The law is complicated and although the facts expressed may seem to be all that is relevant, there may be many other important facts to consider. Also, the law is constantly undergoing change, so what may be correct today, may not be accurate tomorrow. Only a full consultation with an attorney experienced or knowledgeable in the specific legal subject matter is likely to result in the optimal course of action.
You cannot obtain a discharge under chapter 13 unless 4 years have elapsed since the filing of the chapter 7 case and the filing of the chapter 13. However, you can still file a chapter to cure your mortgage arrears. If the HOA has a lien, you may be able to strip the lien. But, a case is pending before the 11th Circuit Court of Appeals as to whether you can strip a lien when you are not entitled to a discharge.
Chapter 7 Bankruptcy Attorney
As a Broward County bankruptcy attorney, I can tell you that you can file a chapter 13 to pay secured debt even though you cannot obtain a discharge. Has the chapter 7 been completed, has there been a discharge yet? The ability to strip a second mortgage or association lien is lost after obtaining a discharge, (based on local judges' opinions). It may be advisable to file a motion to convert the chapter 7 to a chapter 13. A chapter 13 also permits you to participate in a new mortgage mediation program (LMM) in South Florida. Information on this program is available on my website.
The questions and answers posted on AVVO are for general information and should not be treated as legal advice or establishing an attorney-client relationship.
You can file a Ch 13 after a Ch 7 and get a discharge if the Ch 7 was discharged and 4 years have passed since the Ch 7 was filed. Otherwise, you can file a Ch 13, but not get a discharge. Please see an attorney to discuss the specifics of your case beyond that.
This is not legal advice and I am not your attorney until you retain my office. Always consult with an attorney in your area before acting on anything you read on the internet.
Your answer is surprisingly, that you can file right away. He just can't get a discharge. He might file a where his plan pays back the HOA in full and seeks to modify the mortgage. He shouldn't have any unsecured debt and if the plan makes sense, he may be allowed to stay in it.