Not Filing, 80 plus need to walk away from BOA and HOA got questions

[2WaitNSee]

I am not filing as I only have SS as income. HOA dues are more than condo payment. Own nothing much else, NOTHING over state exemptions. Have been told I am judgment/collection proof due to lack of assets and source of income. Worrying about everything.

If I just walk away from condo and they do not foreclose immediately can (1) HOA collect dues from me?, (2) County or local property taxes garnishee my bank account or SS?, (3) What about insurance on condo?

I am in my 80's only income SS and only have worries to keep me company. Is my only option staying and not having money for living or can I leave it all behind. Would be looking into nursing home or government income regulated housing.

Thanks for any advise.

[OHBOY]

Please take everything I say with a grain of salt as I am not an attorney..... I am just giving you my thoughts (not always totally correct or accurate...) from one 'old timer to another ( I am 82).

You did not say what your equity in the condo is, but ok, if you have no or little equity, if I was in your shoes I would hope that bank does not foreclose right away and I would just stop mortgage payments and live there until they are about to 'kick me out'.

As to the HOA dues, I don't know about Indiana, but I know in FL HOA's are quite powerful and they can put a lien on a property. I am quite sure that neither HOA nor local property tax can attach to your SS.

I know that SS security can be attached for court ordered child support, but not for court ordered spousal maintenance. I believe that other than that, the IRS is the only other agency/threat that can 'mess' with SS.

It is also my understanding that local government can not touch your bank account for back taxes.

If you are thinking about defaulting on any credit cards or medical bills, ect. you may also want to consider the following, as I am quite sure that along the way you would eventually get sued. I know you said that SS is your only income and so I would think that you do not comingle any other monies with the funds in your bank account. There is now a new law that obligates banks to decipher between the protected, exempt from creditors SS and other funds, however just to avoid any possible hassle personally I would open up a new non bearing interest rate checking account that's clearly identified by the bank for SS only. You also have the option of getting your SS deposit into a card (that's what I did, and personally I just get my SS cashed each month at any bank...no cost doing that, but than you have the hassle of getting some money orders to pay your bills. Instead of withdrawing all at once, you can also use the card as a debit card if you wish-with fees).

Anyhow, I know that the worrying (mostly about the unknown) is not good, and the best advice I can give you is: unless you develop stamina and are able to put the worries aside you may still find bk the best option. In the long run as bk in the end puts an end to all of that useless worrying.....

I would also advise you to talk to a couple of bk attorneys (initial free sessions), and while there bring up all of your concerns and get the legal input.

[2WaitNSee]

Thanks OHBOY, I appreciate your advise and will definitely check into the card or new bank account.

[keepmine]

I 2nd sttop paying and stay as long as you can and start using that money to live on.
As to HOA fees in bk-yes, fees accumulated prior to filing are discharged. Fees that accure after you file become your responsibility so, I put off filing until the condo does foreclose and is out of your name.

Here's alink to an article about the law protecting SS benefits that OHBOY mentioned.

http://www.consumeraffairs.com/news04/2011/02/new-federal-rule-protects-social-security-va-benefits.html

[2WaitNSee]

Thanks for the link, will check it out....

[OHBOY]

The 'card' is called 'Direct Express'.
BTW, I have no clue as to property insurance. If it's part of your escrow with your mortgage and you quit paying, well that's it..... If you are responsible to pay insurance directly, then I would think it's up to you on whether or not you are going to keep on paying giving the scenarios that you are proposing. Keep in mind that property insurance does pay for loss on your personal belongings.

[tobee43]

welcome to the forum WaitNSee. i'm so sorry to hear you are so stressed out, this simply is not fair at your stage of life, so let's see if we can alleviate some for you by reviewing some of your immediate concerns.

first, indiana is known as a lien theory state where the property acts as security for the underlying loan. in indiana, the lenders go to court, in what is known as a judicial foreclosure. (although, it must be noted that indiana is actually considered both a judicial and non judicial state). what does that all mean to you? it means that if your lender will most likely be using the judicial process. it could take well up to 3-4 years before they actually foreclose forcing you to actually leave the premises. some do go quicker. also, your age may actually work for you in this case, since the judicial process uses the court system you can fight leaving the premises, even if you are eventually intending to leave. that way you can save money before you move, also, judges do not want to be known for throwing 80 year old people out in the streets!

yes, while HOA fees, dues, and assessments will withstand a bk since they are what are considered subordinate liens and can be put on a mortgaged property and carry over after the you have completed your bk. you will still owe the money. is there a way your HOA will work with you? i know we have "forgiven" many of our homeowners because of financial difficulties. i know that's not the norm, but maybe someone will work with you, you never know until you ask.

interesting thought on the subject matter of the HOAs, on a personal level, i am working diligently to change that process with the HOA's i work with and passing on these dues, late fees etc., to the lenders themselves, or the new owner. by passing new bi-laws i'm hoping other HOAs through out the country will do the same and find these large property management companies who are buying all these homes for pennies on the dollars be responsible as opposed to the poor person who filed bk or had to leave due to financial hardship. here in florida a new set of rules came out in the statues on july 1, and i'm working or trying to work around them so we can begin to really get these lenders to pay. (they force people from their homes and then buy them back and resell them everyday without a blink of an eye). without clear title!!!

moving on, sorry about that! your SS income is completely exempt from all creditors. although it should never happen sometimes banks let the money go and you have to fight to get your money back. that would be the worse scenario. your back property taxes are included in your bk and moving forward are the responsibility of the lender unless they want the property to up for tax sale, a rarity today. once you stop paying your taxes and insurance in the majority of situations the lenders step in and pay both.

best of luck to you. i know easier said than done, but try and not worry yourself about this. it can be resolved one way or another. come to the board here on the forum, there is always someone here to help

[Pjmax]

I didn't see where anyone asked this, but is there any equity in the condo? Since you plan on leaving anyway, can you sell it?

[2WaitNSee]

Not really, and there are several for sale signs in the community on larger ones and some that have been remodeled. Don't think I have "time" for a sale.

[LadyInTheRed]

If you're only income is Social Security, with exceptions already mentioned, you are probably collection proof. But, you are not judgment proof. You can be sued and have judgments entered against you. Even if they get judgments, unless you have asset that are worth taking, there is nothing creditors can do except call you. When one creditor gives up, they'll sell the debt and somebody else will call you. Some can deal fine with that, others not so much.

Because you are a worrier, I suggest you consider bankruptcy. Stop paying the mortgage and live in your condo until they foreclose and evict you. You could also stop paying your HOA dues. But, find out whether that will result in denial of access to certain "privileges". I have heard of HOAs who will cut off your access to common areas and even disable electronic entry and other conveniences. They can't deny you access to your condo, but they can make things unpleasant. This is not true of all HOAs. Some are more ruthless than others. If you stop paying HOA dues, then you should wait until after you move to file BK so that the HOA dues are discharged.

If you file BK, you will put your debts behind you and can enjoy life without worrying about lawsuits and debt collectors. It is true that people sometimes hear from debt collectors trying to collect discharged debts. But, they are easily dealt with by sending a copy of your discharge order or by giving them your case number and telling them that if they continue to collect, you will file a complaint for violation of the BK court's inunction against collect. A BK discharge is a powerful thing.

[bcohen]

I third the excellent advice given above--quit paying the mortgage, HOA dues, homeowner's insurance, and property taxes. Live there for free while foreclosure is underway, then move out and rent. Banks typically drag their feet on foreclosures in a HOA, because once they take possession, they are responsible for the dues, whereas if they wait to foreclose, the homeowner is. Therefore, you could very well live there--payment free--for a couple of years or more.