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Lien "Strip" and Bankruptcy / Ch. 7 or Ch. 13?

Orlando, FL |

I am facing foreclosure due to an HOA lien on my property.


Three years ago, the property management changed to a new company, with monkeys for accountants! I have attempted to fight the lien, showing how the amount claimed is inflated and miscalculated. I even showed cashed checks that weren't credited! The judge couldn't care less and there is now a sale date on my property.


I have been advised to file for bankruptcy in order to stop the sale date, "strip" the lien, and begin to make my regular HOA payments. However, one lawyer claims the lien can be "stripped" via Chapter 7, while another says that only Chapter 13, 12, and 11 can strip liens.


Which lawyer is right? Thank you!

Attorney Answers 8


  1. As of today, you CAN strip in either chapter 7 or chapter 13. Presuming you qualify to strip the HOA lien based on property value and amount of your first mortgage.


  2. There are only a few jurisdictions where bankruptcy judges have allowed a strip of a jr. lien in chapter 7. Typically you can only strip the lien in a 13 and there are some limitations. The value of your property MUST be lower than the amount you owe on the 1st mortgage. Your bigger problem is the fact that the bankruptcy code allows HOA's to continue collecting fees even if you're in a chapter 7 until you no longer have an interest in the property.


  3. We do not know how long this will last, really, but it can be either a 7 or 13.

    R. Jason de Groot, Esq.,


  4. Technically, the lien stripping can potentially be done in either chapter 7 or 13. However, if you are in foreclosure, a chapter 7 will stop that proceeding only for a short period. You may be better off filing a chapter 13 to provide a longer term solution. In chapter 13, you can begin making regular payments to the HOA again and pay down the arrears owed, if any, through the bankruptcy plan over time. I would definitely recommend consulting an attorney. Good luck!


  5. WOW! It seems like the same lawyers are advising you in FL that are advising someone in DC and NY. Both other questions refer to monkeys as accountants too! You need to disclose where you really are, as these issues are quite district specific. So the lawyer in FL is right about chapter 7 strips, and the one here in MI is correct about only in 13's. I suggest you consult a local attorney if you want the answer that applies where you actually are.


  6. Assuming you are not a fisherman or farmer (Chapter 12 applies to these folks) or have assets over a million dollars (if so, you must file for Chapter 11), you can strip the lien in either Chapter 7 or 13 if 1) you have a mortgage on your condo and 2) the amount of your mortgage is more than the fair market value of your condo. If you are $1 or more upsidedown on your condo, you can strip the HOA lien.


  7. The answer to this question varies from state to state. Lien stripping is complex. It is a hot issue being litigated all over the country. There are rulings both ways and appeals are pending.

    I urge you to hire an Orlando bankruptcy attorney who has experience with lien stripping immediately. Deadlines apply and you will be prejudiced if you wait.


  8. Our federal circuit is definitely in the minority of allowing lien strips in Chapter 7 case and Chapter 13 cases. You'll want to speak with an experienced attorney to determine if your specific lien can be stripped - in certain cases liens cannot be stripped.

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