Opinions Needed - HOA Settlement Question

[nioka]

I was planning to file chapter 7 when foreclosed upon. I was hoping for either the bank or HOA to foreclose. It has now become obvious that the HOA will not foreclose as the house is upside down. In speaking with the Chase Currier, Chase is over a year behind on foreclosures in my area. I want to surrender the house and move on.

One attorney told me not to pay the HOA assessments because my income is bullet proof. Another told me to pay the HOA assessments as it is cheaper than rent. (Both sound arguments).

I have gotten mix advice here too and all of it great advice.

The final blow that caused me to seek bankruptcy was a felonious fine from my HOA. Briefly, I requested a permit to have a rotten tree that was threatening to fall on my house removed got and then was fined for taking the tree down. One attorney advised me to pay the fine as it was the cheaper option. However, it goes against my grain to allow myself to be subjected to such extortion.
Today I tried to be objective and called the HOA to see what could be done. I requested that the fine be eliminated of which they refused. However, they did purpose that I catch up the back dues and go on a monthly payment plan for the fine of $20 monthly.
If I agree to this my monthly fees would effectively go from $100 to $120 per month for both fees and fine with an initial payment of about $300 to catch up the past due amount.

My thought is that I really don't want to fight a battle on two fronts meaning the HOA and the bank. If I pay the HOA and wait for Chase I may be here for a least a year. Total HOA cost for 2014 would be $1500. If Chase would foreclose early the amount paid to the HOA is not that much to worry about. If I am here for a year I would be saving the monthly mortgage amount while paying the HOA and that would be a good trade off financially.

The second issue for me is when to file. The TN exemption is $10K. With my car valued at $4500 I will hit the limit in the next few months. It doesn't make much sense to me to accumulate more that $10k prior to filing as the trustee will use the excess to pay my creditors. I believe I will need to file prior to foreclosure and with the HOA paid the only thing to do is wait for the bank to act. For what I have learned that could take a year or more.
This is not what I want as I would like to leave but if staying in my home with no mortgage payment is an option then so it is. If the bank stalls the foreclosure I realize I will need to pay the taxes and insurances. (Taxes are dirt cheap where I am).

I think the bottom line is that my 2014 HOA fees and fine would cost $1500 and I don't think the money involved is worth the hassle.

Thanks.

[nioka]

No opinions at this time?

Let me add that my HOA has told me that if my account remains delinquent they will demand the current requirement of a years HOA fees in advance. The same would apply if the HOA assessments are declared in chapter 7 and discharged.
That figure would be about $1200 initially followed by the monthly fee of $100 every month.

[BobMango]

Are you planning to pay just to avoid getting hassled by your HOA? If you have already decided to walk away at some point I don't see why you'd pay anything. At this point what can the HOA do? (if your income is "bulletproof").

Sounds to me like you should stay in the house until one or the other forecloses. Convert the savings into exempt property in the meantime. I believe Tennessee allows you to protect an IRA. Once the house is gone you can file and get a fresh start.

[nioka]

BobMango,

Thanks for the reply.

I plan to walk away as soon as there is a foreclosure. I have been told Chase really drags their feet. You are correct, I was thinking about paying the delinquent HOA fees/fines to avoid a hassle. Many here a BK have suggested the same as you in not paying any HOA assessments of which I believe to be a good strategy.

I called the HOA to see what they might say and any action to eliminate the fine is unrealistic. I wanted to do this in case someone of authority asked if I tried to settle with the HOA. I did, and it failed, so time to move on.

I am not sure about an IRA especially at my age, 70, but I think they are limited to $5500. If this is true an IRA would help butthat would only add another few months of my not exceeding my total exemption of $10k which includes my car.

Second issue is my SS and pension income. Without a mortgage, CC, and HOA fees it is difficult for me to spend on exempt items.
One major factor is that I plan a cross country move and buying more items to move is not practical.

I really don't want to pay that fine because it was unfair and unjust and have all the assessments discharge including the fine. I realize I would need to pay the HOA going forward. However they have warned me that with their new rules and delinquency will result in a demand for one years dues paid at once. (I am not sure if that would apply to bankruptcy). I didn't want to get hit with a demand for $1200 the amount of my total annual dues. Regardless it is still cheap rent and I should have plenty of time to recover my outlay.

Incidentally, if I were younger I doubt I would be bothered by all this. However, at age 70 the stress is really taking it's toll. This is another reason I would like to file.