If the HOA has a lien on the property, there is little that you can do if they won't negotiate. Bankruptcy could wipe out your personal obligation to pay the pre-bankruptcy HOA dues, but you couldn't remove the lien in a Chapter 7.
HOAs tend to be very stubborn about this type of thing.
First, the firm is a debt relief agency according to the U.S. Bankruptcy Code. We help people file for bankruptcy. We also do other stuff and we do it well, but Congress wants me to post this notice. Second, nothing on this site is legal advice. You are not my client unless you enter into a written agreement signed by you and me.
As was stated in the earlier answer - HOAs are difficult to work with.
In addition to that issue you may have other problems. Make sure you talk to a good CPA or tax attorney about the tax consequences of doing a short sale. Also, you need to ask a good real estate/foreclosure attorney about your exposure should one of the lenders foreclose.
Lastly, bankruptcy: please understand that bankruptcy is a very complicated process. It is wise to talk to an experienced bankruptcy attorney before deciding to take this important step. I am attaching a link to some free videos that explain how bankruptcy works. Most Arizona consumer bankruptcy attorneys offer a free consultation about the basics of bankruptcy. So, check in your state for the same option, if possible.
Please take time to educate yourself about bankruptcy and to determine which attorney is the best to assist you in the process. Don’t assume the attorney is being completely honest about their experience and capabilities. Check them out. Avoid the attorneys who advertise on TV or profess a 100% success rate in their Internet ads. It costs hundreds or thousands of dollars for these ads and someone has to pay for them – the clients. These attorneys mass produce the work and do not offer the client the hands on assistance that is necessary in a well-planned bankruptcy. Normally these firms assign all or most of the work to paralegals and the client rarely talks to an attorney.
When interviewing the attorney ask them how long they have practiced bankruptcy law. Ask what percentage of their practice is focused on consumer work. Ask whether they are experienced in both chapter 7 and chapter 13 cases. Ask the attorney for references. Ask about their policy of returning phone calls. They should be committed to answering specific questions about your situation and help you understand your options. If, after talking with them you are still confused about the issues you raised, find another attorney. Check them out with the various ranking sources: such as www.AVVO.com, and the State Bar. An attorney is should be your guide through this process. They should educate you, be there to assist you in how to avoid pitfalls and help you plan for your future after bankruptcy. There are hundreds of “bankruptcy” attorneys in Arizona. Of those just a few will fit the criteria set forth above. Again, bankruptcy is a very complicated process and you want to use an attorney who will be there when you need them.
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This firm is in the business of helping people and companies file for bankruptcy protection. Therefore, the bankruptcy code requires that we call our firm a "debt relief agency." This information is provided for general information purposes only and is not intended to be a legal opinion, legal advice or a complete discussion of the related issues. Nor is this advice intended to create a client - attorney relationship. Every individual's factual situation is different and you should seek independent legal advice from an attorney familiar with the laws of your state or locality regarding specific information.
A deed in lieu will not wipe out condo liens - the bank would have to agree to pay them to get good title. If you give up the unit and the bank forecloses, that will wipe out the lien and give the buyer good title, so the bank may prefer to foreclose if the dollars are significant. You would still personally owe the fees up to the foreclosure, so you may need to file bankruptcy after that to discharge them. If you keep it, a chapter 13 bankruptcy may enable you to avoid the condo liens from before you file, but you will have to pay going forward.