Posted On: June 15, 2010
Jacksonville Attorney says Homeowners May Still Be Liable for HOA dues after a Bankruptcy Discharge
One major oversight in a number of the bankruptcy cases I deal with is the disposition of Homeowner’s Association Fees after a bankruptcy is discharged. In the typical chapter 7 bankruptcy the debtor who owns a home with a loan on it either surrenders their home and discharges the debt, or keeps the home and signs a reaffirmation agreement that takes the debt out of the bankruptcy and keeps the debtor liable for the full amount of the loan.In a case where the debtor decides to surrender their home, they can discharge the loan amount in bankruptcy and return the home to the lender. The confusion in this process arises in the premise of the surrender. The house does not transfer out of the debtor’s name at the time of the bankruptcy discharge. The house transfers out of the debtors name once the bank/lender sells the property at a foreclosure sale and the deed is transferred out of the debtor’s name and into the buyer’s name.
Under the newly enacted 11 USC 523 (a)16 the debtor is still liable for HOA association fees that accrue after a discharge if the property is still in the debtor’s name. If you have further questions regarding a bankruptcy, contact one of our attorneys to help you with the process.
Greg Gilbert
Keith Maynard
