chapter 7 - condo association

[mylife82]

I am behind on my dues and assessment by 18K at the condo i live in - i have made payments every month and when the 50yr came got slapped with a big bill which put me behind - due to financial situation i have to file now because they are threating a lien with there lawyers office - i have no mortgage on the property - if i list them as a creditor and wipe out that 18k will i be clear to move forward and be on track with the dues ? am i safe with bankruptcy from a lien ? what are the rules i read and hear all different things

[justbroke]

You cannot wipe out the $18K assessment as that is an HOA due or assessment and it will run with the land in Florida. In other words, it must be paid or the unit is subject to foreclosure by the HOA. All liens pass through bankruptcy with few exceptions.

A bankruptcy discharge permanently prohibits creditors from attempting to collect discharged debts from the debtor personally. However, this discharge injunction does not eliminate valid, preexisting liens or security interests in collateral voluntarily pledged by the debtor. Creditors may still exercise their rights against such collateral—for example, through repossession of a vehicle or foreclosure on real property—unless the lien was avoided or otherwise impaired during the bankruptcy proceeding.

In a Chapter 13 bankruptcy, debtors have the opportunity to address debts owed to HOAs by treating the HOA as a secured creditor. This allows the debtor to repay delinquent assessments over the term of the Chapter 13 plan, which may preserve the property from foreclosure.

Under Florida Statutes § 718.116, a Florida HOA has a statutory lien on unpaid assessments as they accrue. By recording a claim of lien, the association puts other lienholders on notice and gains the right to foreclose on the property to collect the debt. These assessments run with the land, meaning they bind subsequent purchasers, but the original owner also remains personally liable for the delinquent amounts.

Chapter 13 provides a structured way to address both the personal liability and the secured portion of the HOA debt. While in Chapter 13, the debtor must remain current on all ongoing assessments as they become due, in addition to paying off the arrears through the bankruptcy plan.


I hope this make sense.