What Happens to Home Owner Association Dues After filing Bankruptcy in Arizona?
On a regular basis, client's will ask whether they owe their Home Owners Association ("HOA") dues after they file bankruptcy.
This can be confusing because you filed bankruptcy and so why would they owe any more money?
HOA fees are based upon the owner of the property. If the property is still in your name, as the HOA dues are earned they will be charged to you as an individual.
When you file Bankruptcy, you still own the property even when you plan to surrender the property.
Thus, you must continue to pay HOA fees until the property is out of your name.
Not all issues work like this in bankruptcy and so this can be confusing.
As long as you understand the process, you can protect yourself from unnecessary fees.
If you get behind in your HOA dues, be proactive. They can become a very expensive problem if they are not addressed. They also apply against you even after you no longer own the property.
In other words, after bankruptcy, you must pay your HOA or resolve them with your HOA or you may be garnished.
If the property is foreclosed before bankruptcy or an HOA asks for money that was included in your bankruptcy, you don't owe them any money unless you did not give them notice. If they did get notice, you may have a cause of action under the bankruptcy law against the HOA that may result in your attorney fees paid, emotional distress and punitive damages.
See my other articles regarding the violation of the Automatic Stay and Discharge to see how to proceed.