The HOA Lien

[nioka]

OP Status - Waiting to file chapter 7, income SS and ERISA pension, no assets, Tennessee, HOA.
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If I were to file for chapter 7 prior to the HOA placing a lien on the property would the stay prevent them from filing a lien?
I am aware that upon filing chapter 7 I would be responsible for HOA fees going forward.

[justbroke]

If I were to file for chapter 7 prior to the HOA placing a lien on the property would the stay prevent them from filing a lien?

The HOA would need to receive relief from the automatic stay (RFS) if they wanted to create or perfect a lien during the automatic stay (11 USC 362(a)(4)). Specifically, the stay prevents any act to "create, perfect, or enforce any lien against property of the estate". The HOA would be precluded from foreclosing without the lien so this would also "stay" any foreclosure.

The HOA would either wait until the case is dismissed/closed or file an RFS. Most lenders would file an RFS anyhow, just to make sure everything is clean and to avoid any issues should the case not "close" for months (or even years). If the HOA chooses to not seek RFS then once the case is closed the HOA could proceed under State non-bankruptcy law with any lien perfection and to seek foreclosure. The filing of the bankruptcy slows things down.

[nioka]

Justbroke,

Thanks for your post.

If I were to file for chapter 7 prior to the HOA placing a lien on the property would the stay prevent them from filing a lien?

I believe the answer is yes to this question.

If this is true then the debt due at the time of filing would be included in the discharge. The homeowner would become responsible for HOA fees going forward from the filing date and if the homeowner complied the HOA would have nothing due them except the normal monthly dues/fees.

Is this correct?

[LadyInTheRed]

That would all be true even if the HOA gets relief from the automatic stay and places a lien against the property or gets a lien before you file.