HOA threatening Lien

[berkeleygl]

So, we are 4 months late paying our HOA fees ($400/month) and we just got notice today from an outside collections agency that if we don't pay the outstanding balance plus fees (total of $2,429.41) by January 8, that they will be placing a lien on the property. We intend to surrender the property and in fact have had it on the market for a short sale for the past 4 months (no takers). It sits empty and the sooner we can wash our hands of it, the better. We are filing chapter 13 in February.

Just wondering if anyone has any advice. We are thinking that offering the bank a deed in lieu of foreclosure may be a good option (there are 2 mortgages on the property)? Should we do this BEFORE January 8th? Will having a lien on the property change the way the banks foreclose?

We have 2 empty properties we are surrendering. So over having to deal with them...

Thanks for any and all advice!

[despritfreya]

The quicker you get your name off of the property the better. Who cares if the HOA puts a lien on the property if you plan on filing bk. Said lien is never senior to the 1st mortgage and will not affect the lender's ability to foreclose. However, if your name is still on the property, once you file (7 or 13 as the 9th Cir. BAP recently ruled on this issue) you must pay all HOA dues/assessments as they fall due from the day of filing bk until the day the property is no longer in your name.

Des.

[ssmdem]

We have HOA dues of only $135 a year. They are due for 2011 on January 31st. We are filing this Tuesday and surrendering the property, which the bank has yet to even contact us about as far as foreclosing. My attorney is assuming we have, at the minimum, at least another 6 months. I asked my attorney "Do I pay this or what?" She just took the bill from me and said "We'll include them in the filing." ?????? So, am I eventually going to have to pay it anyway? I don't mind paying it -- we're not talking alot of money and I would just as well leave the nosy neighbors out of it until we leave anyway. But was scared at this point to pay anything that might be deemed preferential.

[scorpion35]

We have HOA dues of only $135 a year. They are due for 2011 on January 31st. We are filing this Tuesday and surrendering the property, which the bank has yet to even contact us about as far as foreclosing. My attorney is assuming we have, at the minimum, at least another 6 months. I asked my attorney "Do I pay this or what?" She just took the bill from me and said "We'll include them in the filing." ?????? So, am I eventually going to have to pay it anyway? I don't mind paying it -- we're not talking alot of money and I would just as well leave the nosy neighbors out of it until we leave anyway. But was scared at this point to pay anything that might be deemed preferential.

preferential is when u pay one creditor and not the others
your HOA is not an unsecured creditor so its ok to pay them

[despritfreya]

We have HOA dues of only $135 a year. They are due for 2011 on January 31st. We are filing this Tuesday. . . I asked my attorney "Do I pay this or what?" She just took the bill from me and said "We'll include them in the filing." So, am I eventually going to have to pay it anyway?. . .

Since you are filing before this payment falls due then, yes, you may have to pay it. Play the game. List it and see if the HOA tries to collect. If it does, just pay it as you don't want the HOA to go after you for legal fees as it relates to this technically post petition debt.

Des.

[scorpion35]

its only $135 .why not just pay it and save yourself problems down the road

[berkeleygl]

Wow, $135 a year is almost nothing! Between my 2 condos I would have to pay $926/month in HOA fees alone, which is why I am so desperate to unload these properties. There is no way a chapter 13 will work in our case if I have to keep paying those fees.

[bcohen]

As many others have already said, you need to unload this condo ASAP. Also, you should wait to declare bankruptcy until the property is sold or forclosed. The HOA can put a lien on it if they see fit, however if the property is forclosed, their lien is extinguished and they won't get anything. As long as this happens BEFORE you file for BK, you can simply include the HOA as an unsecured creditor, and the debt will be discharged.

[berkeleygl]

Awesome, thanks for the advice. I did hear back from my lawyer and his advice jives with all of yours. We can't file until these properties are gone. We are going to offer a deed in lieu on one of the properties tomorrow, and we got an offer today (short sale) for the other property. I am a little bit concerned about the short sale situation, because I know banks will often drag their feet and take a long time. But in any case, we have some action now which is great.

Thanks again.