Will Chapter 7 Bankruptcy Eliminate HOA Dues in New York City?
Most of our bankruptcy clients in New York City that own their own home live in buildings with steep HOA dues. We are commonly asked if HOA dues are dischargeable in bankruptcy, and the answer largely depends upon whether you plan on keeping your home. If you plan on surrendering your home then it will be easy to eliminate these debts pre-filing entirely, but if you are hoping to save the home through bankruptcy you will most likely need to keep paying the dues and catch up on any overdue back payments as well. Since bankruptcy eliminates the vast majority of your other bad debts any future payments to your HOA will be much more affordable after filing.
Like many New Yorkers your home may have also been negatively affected by the housing downturn and economic crisis of a few years ago. If your home is already underwater and you can’t continue to make your payments anyway then it may be in your best interest to surrender the home in Chapter 7 bankruptcy. If you surrender the property any debts associated with it, including your HOA dues, will be discharged. However, even if you surrender the property you may be liable for HOA dues that accrue after your filing but before the home is sold. It’s very important to speak to an attorney if you own a condo so you aren’t held personally liable for post bankruptcy HOA dues.
On the other hand, if you plan to keep your home in Chapter 7 bankruptcy then you will need to address your HOA dues in the same manner as you would your mortgage payments. Bankruptcy can help you catch up on payments, but to keep your home out of foreclosure indefinitely you will need to pay your mortgage and your HOA dues. Bankruptcy won’t eliminate this burden, but it will make it considerably easier to manage. If you are behind on your HOA fees, the bill can quickly get out of hand if they start adding late fees, penalties and possibly attorney charges. Speak to your bankruptcy attorney about your options before slipping any further behind on your HOA payments. Bankruptcy can probably help.
That being said, bankruptcy is not for everyone, and late HOA fees alone wouldn’t usually justify filing for Chapter 7. However, if you are underwater on your home or behind on your bills with no foreseeable recovery you really should get the free advice you deserve. Bankruptcy is not a guessing game. We know the likely results of a bankruptcy case before filing. When it’s in their best financial interests and in line with their personal goals our clients can almost always keep their homes, cars and valuables out of the hands of the bankruptcy trustee. If you live in New York City and are having trouble making your HOA payments please contact the Law Offices of William Waldner online or at 212. 244.2882 to arrange a free consultation today. We only practice bankruptcy law and a have a 99% Chapter 7 bankruptcy discharge record in New York City as of 8/31/16.
**** DISCLAIMER: This article is intended for educational purposes only. By reading no attorney-client relationship has been created. Prior results do not guarantee a similar result for future clients.