HOA Lawsuit for Lien Foreclosure

[helpmehelpme]

Last Monday I received a summons for an HOA lien foreclosure. I spoke with a bankruptcy attorney who told me I should contact the attorneys and see if they will work out some sort of agreement. It says the past due balance is $7900 and something about $4k in attorneys fees.

If they do agree to work with me, would the lawsuit be halted like a stipulated judgment? I’m worried about giving them 1000’s of dollars and having them still foreclose. Does anyone know how it works? It would be tight but I could come up with $3-4k right away…

Is it better to work something out with them or just file a Chapter 13? The problem is, all my other debts are current. .

Any thoughts and advice would be helpful. Thanks in advance.

[justbroke]

Last Monday I received a summons for an HOA lien foreclosure. I spoke with a bankruptcy attorney who told me I should contact the attorneys and see if they will work out some sort of agreement. It says the past due balance is $7900 and something about $4k in attorneys fees.

When it comes to liens and foreclosure, HOA foreclosures are no joking matter. The fees accumulate rapidly and you could be facing a foreclosure as quickly as the HOA decides to proceed down that path.

If they do agree to work with me, would the lawsuit be halted like a stipulated judgment? I’m worried about giving them 1000’s of dollars and having them still foreclose. Does anyone know how it works? It would be tight but I could come up with $3-4k right away…

In my experience, they will usually give you some payment terms which usually includes; a.) paying a bunch of it immediately, b.) setting up an installment plan to pay the rest over some period of time (I don't know if it would be 6 months or 12 months, c.) agreeing to sign a stipulated agreement, and possibly d.) they obtain what you called a stipulated judgment. The installment agreement will likely contain clauses that say that you must keep all other payments current that come due.

Is it better to work something out with them or just file a Chapter 13? The problem is, all my other debts are current. .

A Chapter 13 would fix this issue as you would be able to cure the default, the back payments and attorney fees, by putting it into the plan. The question you're probably asking yourself is whether it is worth it to enter into a Chapter 13 now. If all your other debt is current I wonder if the impact of the foreclosure suit is hurting you much, that you may be better off filing a Chapter 13 to save your property. Other considerations include how much equity do you have in the property.

Have you considered borrowing $12K on a 5-year loan and just paying them with the proceeds of the loan?

I don't know if despritfreya has any ideas, but bankruptcy for $12K may not be the best use unless you are trying to save your home (especially where there are equity considerations).

And... welcome to BKForum.

[despritfreya]

. . . I received a summons for an HOA lien foreclosure. I spoke with a bankruptcy attorney who told me I should contact the attorneys and see if they will work out some sort of agreement. It says the past due balance is $7900 (plus). . . $4k in attorneys fees. If they do agree to work with me, would the lawsuit be halted like a stipulated judgment? . . . Is it better to work something out with them or just file a Chapter 13? . . .

1. What is the date on the summons? You have 20 days from that date to file an Answer. If you don't file an Answer (or work it out with the HOA) you will receive a default application by mail. It will give you an additional 10 days from the date of the application to file the Answer.

2. Unless the HOA has an issue with you, it does not want the property. It wants its money (including all fees). It is always better to work it out with the HOA - now through the HOA's attorney.

3. What law firm filed the lawsuit? I may have a contact person for you to talk to.

4. If you are able to work it out, you would want the HOA to put the lawsuit on hold by getting an "open extension" to file an Answer, with a 10 day call - meaning that if you don't live up to the agreement, the HOA will give you written notice that you have 10 days to get an Answer filed.

5. Assuming you work it out and complete the agreed payments, once current you would want the HOA to dismiss the lawsuit.

6. Filing the Chapter 13 over a $12-15k problem should be your last resort.

I like JB's suggestion about borrowing the funds. If you have access to a 401k maybe take out a loan from there????

Des.

[helpmehelpme]

despritfreya Thank you so much for responding! We were served on Sept 6. The attorneys are Maxwell & Morgan. 😑. That would be great if you could share the name of your contact person. I would be very grateful. It may be possible to borrow the money..I’m just hoping they will work with me. I’ve heard horror stories about them.

[despritfreya]

despritfreya The attorneys are Maxwell & Morgan.

Try Charles Sellers.

While I can’t give you my name as a reference, I can tell you that I have found him to be very trustworthy and helpful in the past.

The firm’s number is (480) 833-1001 (This number should be on the lawsuit papers).

If you are in the Tucson area it is (520) 812-7841.

Charles’ email is:

[email protected]

but you might want to call first, especially if his name does not appear on the lawsuit papers.

Des.

[helpmehelpme]

despritfreya He is the one who filed the lawsuit. 😑. I still need to call and discuss with him, right?

[despritfreya]

Yes, give him a call tomorrow.

Des.

[helpmehelpme]

despritfreya Will do. Hopefully he will work with me. 🙏🏻🙏🏻

[helpmehelpme]

despritfreya I was able to speak with him. He wants me to submit a payment arrangement proposal to the HOA board.

If it is approved and we make all the payments, would they be able to foreclosure at the conclusion for ‘more fees’ or something like that? I’ll be sure to get everything in writing before I pay any money but I just want to rest assured.

[despritfreya]

1. Submit proposal immediately with a copy to Sellers. There will be some additional fees so you may want to call Seller back to find out how much to add to the amount asserted as due. There would be a filing fee for the lawsuit as well as some attorney's fees but I do not know how much.

2. When sending a copy of the proposal to Sellers ask him for the "open extension" to file an Answer, with a 10 day call that I referenced above. Get him to put that in writing.

3. If you complete the "approved" payment plan Sellers should dismiss the Complaint - no foreclosure.

Des.

[helpmehelpme]

despritfreya The HOA isn’t meeting until 9/23 and the “Answer” would need to be filed bythe 26th. I asked Sellers for the Open Extension to Answer with 10 day call and he said they would be happy to provide extension thru the end of this month only and as soon as there is a decision from the HOA he will let me know. He called it a Rule 408.

Any thoughts on this and what we should do?

Thank you.

[despritfreya]

So he is willing to extend from the 26th to the 30th. Not much time but, remember, if no Answer is filed you still get an additional 10 days by way of the Application for Entry of Default Judgment.

You can always request additional time if the HOA does not respond within a few days of its meeting. The idea is to keep the conversation open.

Des.

[helpmehelpme]

despritfreya Do you think it means they’re leaning toward not working with us to resolve? And, after an answer is filed are negotiations considered closed?

[despritfreya]

I don't read anything into it and negotiations are never "closed". Just keep on top of it.

Des.

[helpmehelpme]

despritfreya The HOA meeting was on Thursday night and I am still awaiting a response from Sellers. How should I proceed? Should I email him on Monday or wait for his response and ask for more time to file the answer? I was hoping to come to an agreement before I have to file the answer because I’m worried about him filing for an MSJ.