For many bankruptcy clients, the most complicated and intimidating aspect of filing for Chapter 7 or Chapter 13 is determining whether they’ll be able to make their Homeowner’s Association dues payments after the bankruptcy is over. These dues run with the property and are used to pay for common expenses such as sidewalks, landscaping, community pools, and other amenities. While bankruptcy can make this situation much worse, the best way to approach the situation is to be prepared. Check here –

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Although HOA dues are typically not dischargeable in a bankruptcy case, the California Civil Code allows them to take a lien on the home. As a result, if you file for bankruptcy, the HOA will continue to collect unsecured debt even after the bankruptcy has been discharged. Congress addressed this issue in its 2005 overhaul of the bankruptcy code, and under 11 U.S.C. SS. 523 (deriving from the Bankruptcy Code), HOA dues are not dischargeable.

As the housing market has become more depressed, some homeowners have been facing problems with their mortgage payments and HOA dues. Some have been sent into foreclosure by their HOAs. However, the state law that permits HOAs to take drastic action isn’t available for all states. In Georgia, for example, foreclosure cases have risen substantially during the current recession. Despite this, HOAs have a wide variety of options.