Final judgement & forced sale notice

[clickman]

Just days away from filing my Chapter 7 BR. Unfortunately, not soon enough it would seem.

Owe back HOA dues; they turned over to attorney for collection. I have just got notice of “Summary Final Judgment and Motion for Attorneys Fees” in the mail.

It stated that unless I pay him his fees (highly inflated, but that’s another story) within 3 days, my home will be sold on January 25th at public auction at the county courthouse. I simply don’t have the money to pay his “fees”.

If I understand Chapter 7 correctly, my BR would wipe out his fees (I would then have to file a motion to vacate the judgment to get it off my credit report) but he would still have a Lien on my property.

My questions;
1. If I have a successful Chapter 7 BR and his “fees” are wiped off, can he still proceed with selling my home?
2. Is there any reason with his “Summery Judgment” that I would NOT be able to successfully discharge them in BR assuming that everything else is OK?
3. Is the “motion to vacate the judgment” after BR pretty much a done deal assuming the proper paperwork is filed?
4. And MOST IMPORTANT could he still force the sale of my home? He will still have a Lien on my property, but I’m not really concerned about getting the Lien removed unless it’s a simple procedure as I don’t plan on moving again in my lifetime.
5. ALSO, in the paperwork I received, there was this wording; The United States of America shall have the right of redemption provided by 28 U.S.C. 2410(c) for the period provided therein, running from the date of the issuance of the Certificate of Title issued therein.
6. I have an IRS tax Lien on the property. Does this wording simply state that if the property is sold, the IRS gets its cut and/or VERY IMPORTANT will this Judgment trigger the IRS to take action now? Right now, all is peace & quite with the IRS as I don’t have much equity in the property.

Needless to say, this has me totally worried as to what the future holds for me. Any advice will be most welcome.

[tcreegan]

Hi clickman,

The 'pay in 3 days or property will be sold Jan 25' is a debt collectors hollow threat, and should be your idea of a joke. Florida is a judicial foreclosure state and it would be at least 6 months before a foreclosure sale could be made.

You are correct that his fees + pre-petition HOA fees go away in the BK, the judgement doesn't matter.
You are also correct that you can file a motion to vacate the judgement after your BK discharge, shouldn't be a problem, law = Fla statute 55.145
28 U.S.C. 2410(c) refers to a US Govt lien, most likely the IRS as you mentioned. Their lien has priority status so they don't have to worry about a non-priority lien. The IRS would get involed if there was a sale or transfer of the property. Like you said, they get their cut first.

The big issue that I don't know enough to help you is a judgement lien against the property, I'm pretty sure it has to be recorded somewhere, not sure if there is a time-frame involved...

Anyhow, hope some of this helps...

Tom in Colo

[clickman]

Hi Tom, thanks for the reply. Unfortunately I can't help feeling that its not that cut and dried. The "notice" was mailed from the att office and is 4 pages long.

The heading at the top reads "In the Circuit Court of the Ninth Judicial Circuit, In and for Orange County Florida"

The HOA association in the Plaintiff, I am the Defendant. Next is the wording "SUMMARY FINAL JUDGMENT" After that it states ORDERED AND ADJUDGED as follows:

From there it list the atts "fees" states they have a Lien for the sums "due" them and gives a legal description of my property.

Then it goes on to say if "all sums" are not paid within 3 days, the clerk of the court shall sell the property at public sale on January 24th to the highest bidder in accordance with 45.031 Florida Statutes.

Then it ends with DONE AND ORDERED in Chambers, at the Orange County Courthouse on this 28th day of October and has a Circuit Judges name and is rubber stamped.

The end says CERTIFICATE OF SERVICE by mail on 28th of October (actual postmarked November 3rd)

If anyone can give me more information on this, it would be GREATLY appreciated. And please don't fail to read my original post as well. Waiting on pins and needles.

Thanks!

[Pandora]

I think the question that needs to be answered is what is your intention with your house - keep it, surrender?

[clickman]

Absolutely keep it as per my original post; "I don’t plan on moving again in my lifetime." Have successfully done a loan modification, current with my mortgage payments.

[Pandora]

I've found this bit of information for you:



"If you file for bankruptcy protection, there's an automatic stay, which immediately stops all debt collections and foreclosures against you, including the HOA's attempts to collect the unpaid fees. However, if the HOA has a lien against your property before you file for bankruptcy protection, and you file under:

* Chapter 7, then the lien will not be erased (because it's a "secured" debt, which means your home is collateral or a guarantee for repayment of the lien), but most of other debts will be erased, like credit card debts and medical bills.

* Chapter 13, and you included the HOA's lien as part of your 3-5 year repayment plan, and you make all of your scheduled payments under the plan, then the HOA can't do anything at all because the lien was paid off as part of your 3-5 year repayment plan. However, if you don't repay the debt as agreed to in the plan, the HOA can have the automatic stay removed and begin foreclosure proceedings to collect the debt.

As you can see, if you're in this situation, it may be better for you to file a Chapter 13 bankruptcy, as that way you repay the debt owed to the HOA and you can keep your house. A Chapter 7 bankruptcy will only buy you some time to work out some sort of deal with the HOA, but it won't stop a foreclosure indefinitely.


Foreclosure

Foreclosure is when a creditor, like an HOA if it has a lien against your property for unpaid HOA fees, takes your property as payment for the fees. Generally, you can stop a foreclosure immediately by paying all the fees that you owe to the HOA.

If you can't or don't pay the fees or file for bankruptcy, there are two types of foreclosure actions that your HOA might use:

* Non-judicial foreclosure, which allows the HOA to take your property and sell it at auction without a court order. This type of foreclosure by HOAs is allowed in only some states, including California.

* Judicial foreclosure, which requires the HOA to go to court and get an order authorizing it to sell your property, but only after the HOA gives you notice of the non-payment or lien and a certain amount of time to "cure" the default by paying the fees or assessments that you owe

The laws on foreclosure vary from state to state, so be certain to check the laws in your area to make sure that your legal rights are protected if your HOA attempts to foreclose on a lien."

[Pandora]

Also found this re: FL HOA rules - assuming it's for the entire state - but dont quote me on it. Has alot of info for you - hope it helps.

http://www.ccfjedu.net/HOACOLLECTIONDUES.htm

[clickman]

Hi Pandora,

Thanks for the reply. Chapter 13 is not an option, over 30M in credit card dept. I easily qualify for Chapter 7. Based on what you have told me, am I correct in the following assumptions?

1. That I can wipe out BOTH the HOA dues and the Attorneys fees in Chapter 7?
2. And am I correct in saying that although I would still have a Lien on the property but since the "debt" has been wiped out, that they could take no further action against me; the only way they could collect would be if I sold my home?
Or could they STILL take any sort of legal action to collect on the still recorded Lien? I'm thinking that after a year or so if they aren't able to do anything with the Lien after the "debt" has been wiped out, they might be open to settling for a lesser amount.

Again, my main concern/question is if I can wipe out both the HOA & Attorney fees in 7, although they still have a recorded Lien on my property can they pursue further legal action against me? (I know they could possible collect if the property was sold in the future)

Thanks

[Pandora]

The way I'm understanding the rule is that once a lien is issued and awarded (which it has been) - and you havent filed BK yet - then you CANNOT do anything, its not discharged under CH. 7 - you must work out something to bring it current else the HOA can enforce it and foreclose. The only way to keep it is to file CH. 13 and pay the arrears during the entire plan.

If I'm not reading it correctly - someone will tell me I'm sure.

[Pandora]

clickman:

From what I've read (and found) - what you received was a final order in the process of the HOA trying to collect their fees. You should've received other notices where you would have had to respond with an answer or something to that effect. So it should've gone something along the lines of:

Complaint filed by HOA - timeframe given to respond

Answer to complaint by you/attorney

After the answer is filed, discovery...

Motion for summary judgment is issued if no disputes; if disputes exist, there's a trial

After the trial, judge issues a Final Judgment for either HOA or homeowner

Final judgment awarded - judge determines award of attorney fees and costs to whomever won.



Sounds to me like you've already been through it all and a final judgment was awarded in the HOA's favor.

[clickman]

Correct.

Does anyone else know if it (for sure) if it can or can not be discharged in Chapter 7 BR?

[Pandora]

Its in the BK code... located here:

http://www.law.cornell.edu/uscode/usc_sec_11_00000523----000-.html

[debee]

I read something on avvo once about being able to remove an HOA statutory lien if it was junior to the mortgage. I would talk to an attorney quickly to find out what, if any, options you have.

OP - did you say 30 MILLION in credit card debt?

ps. whole post is an edit. still waking up!

[tcreegan]

Hi all, Hi clickman,

The Ch 7 discharges your personal liability for the HOA debt, you don't have to pay and they can't try to get anything out of you. After the BK they have a couple options: wait until the property sells/transfers and take their cut out of the sale. Or foreclose on the property and take their cut on the sale.

But they can't come after you, even if they don't get enough $ on the sale to cover their debt.

And a normal financial outfit won't foreclose unless there is enough equity to make it profitable. But we are talking about an HOA here....

Tom in Colo

[Pandora]

Hi all, Hi clickman,

The Ch 7 discharges your personal liability for the HOA debt, you don't have to pay and they can't try to get anything out of you. After the BK they have a couple options: wait until the property sells/transfers and take their cut out of the sale. Or foreclose on the property and take their cut on the sale.

But they can't come after you, even if they don't get enough $ on the sale to cover their debt.

And a normal financial outfit won't foreclose unless there is enough equity to make it profitable. But we are talking about an HOA here....

Tom in Colo

Tom - I believe the discharge for HOA fees is only IF a final judgment and lien haven't been placed already and you are surrendering the property; if it has been placed and you intend to keep the property, then you cannot vacate it.

HHM and justbroke have some posts regarding this very thing - something about the type of lien an HOA creates and it being secured...