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Bankruptcy chapter 7-Delinquent HOA fees and a HOA lien not included.

Pompano Beach, FL |

We recently found out that our HOA unpaid dues were not included in our chapter 7 bankruptcy. We got a discharge in March 2011.
We surrendered 2 properties-both condos in the same complex. One condo had a HOA lien placed before we filed a bankruptcy. My question is: should we reopen a case and include this lien and HOA?
What happens if we reopen a case? Do we have to got back to court and testify in front of a judge? What are best options for us? Should we try to short sale the properties? We are afraid the HOA may place another lien on a second condo.
Any advise will be greatly appreciated.

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Attorney answers 3

Best Answer

This is a complex question and you should consult with the attorney that handled your bankruptcy for specific advice on the issues. Generally, you can include the HOA dues that are delinquent at the time that you file for bankruptcy and discharge them in the bankruptcy. After the bankruptcy is filed, you continue to accrue expense for the HOA that is not dischargeable in the bankruptcy since it is a post bankruptcy expense. The bankruptcy will discharge any personal liability for the loans on the property if the property goes into foreclosure. You would be better off allowing the property to go into foreclosure or signing a deed in lieu of foreclosure than agreeing to a short sale. A short sale is a contract and the contract may waive the discharge of liability for the loans you received in the bankruptcy. You can reopen your case and discharge the HOA dues at the time you filed. You need to file a motion to reopen the case and amend the bankruptcy schedules to include the HOA debt. You can also file a motion to strip the HOA lien. Other than the motions, there are no appearances necessary.

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Assuming the HOA was listed in your bankruptcy petition (regardless of whether they were listed with or without a lien in place), then any pre-petition debt would have been discharged. Oddly, post-petition HOA dues remain your obligation until title transfers. This can be frustrating today as foreclosure sales are taking longer and longer. Even if you have done everything you can, indicated an intent to surrender the property, handed over the keys and physically vacated the premises, you may still be responsible for those post-peition HOA dues.

As far as reopening the case, there is some case law in different jurisdictions that indicate if you innocently failed to list a creditor and there were no assets to distribute, than the debt was likely discharged. However, reopening the case is always the safer bet.

Talk the attorney that assisted you when you filed your case to determine what they would charge to file the motion to reopen the case.


This is a tough issue. Generally, pre-petition HOA dues are dischargeable. Post petition HOA dues are not, unless you have turned over the property to the lender. As to whether the pre-petition dues are automatically discharged, that will depend on your local practices and whether the case was an asset case or not. Depending on local practice, you may have to reopen the case. You should consult with a local bankruptcy attorney to see if you will have to reopen.

Please note that I am not admitted to practice outside of the States of New York and New Jersey. Anything stated by me in this forum is for general informational purposes and is not intended to be taken as attempting to practice law in any juridiction in which I am not licensed. Further, the reading of these answers is merely for informational purposes only and does not create an attorney-client relationship absent the signing of a retainer agreement.