Question HOA Attorney Violating Stay

[Sariah]

What are or can be the consequences of a debt collector violating the automatic stay? Specifically, an HOA attorney sending an "intent to foreclose" for past HOA fees?

Sariah

[helpmeout]

Let your BK attorney know what is going on. S/he will take care of it.

[tobee43]

did the paper work maybe cross in the mail with the notification of the bk. many times the notices go to the board of the HOA's and THEN they pass it on to their atty's. a month could have passed before that even happened, if not more time.

i would call you atty, and i would contact the HOA directly if you can, and tell them to stop if you know anyone on the board.

HOA's can be terrible about it!

[justbroke]

What are or can be the consequences of a debt collector violating the automatic stay? Specifically, an HOA attorney sending an "intent to foreclose" for past HOA fees?

This really depends! If it's for "post-petition" HOA fees, then they have every right to employ any process to collect and foreclose upon the property. If this is for "pre-petition" HOA fees, then it is a violation of the automatic stay (or the permanent discharge injunction).

When did you file? For what time period does these fees pertain to?

[ruttie]

I don't think HOA fees are wiped out in bankruptcy. Are they billing you for the HOA fees and your property is in the BK exemption?

[tobee43]

i know what we are doing here, in our HOA, is putting a lien on the property until the bank is backed into a corner to have to clear the title of the property for its resale purposes. so actually, the way it's working out is that the cost of any past dues are being passed on to perhaps, even the new owner.(we reallly don't care where they come from at that point).

however, we don't go after the old owner in this HOA if they went bk and or into foreclosure. however, each HOA handles things differently, we have at least, by handling it this fashion, in this HOA, been able to recover some money by the way we are doing it.

[HHM]

Actually, most likely not a violation of the automatic stay. The automatic stay does not prevent the continued efforts to perfect a lien (which is what is going on here). Unfortunately, BK does little to deal with HOA issues, aside from relieving your personal liability for pre-petition dues, the HOA can do many other things. They can still pursue the lien, even for pre-petition dues notwithstanding the BK. So, what you are getting is probably required notices, no obvious violation.

Sorry.

[bcohen]

Actually, most likely not a violation of the automatic stay. The automatic stay does not prevent the continued efforts to perfect a lien (which is what is going on here). Unfortunately, BK does little to deal with HOA issues, aside from relieving your personal liability for pre-petition dues, the HOA can do many other things. They can still pursue the lien, even for pre-petition dues notwithstanding the BK. So, what you are getting is probably required notices, no obvious violation.

Sorry.

Assuming that the HOA had already placed a lien on the property, you are correct that filing for BK does not remove the lien even though the underlying debt (the back dues) could have been discharged otherwise. It is correct that the HOA can still forclose its lien (if the state that you are in allows this) however I do not think this can be done during an active bankruptcy case.

However, if the HOA had not already brought suit and placed the lien on the property, attempting to do so now is a violation of the automatic stay.

If you have an attorney, I suggest you discuss this with him/her ASAP.

[HHM]

I hate to be a code jockey here, but it is arguable that section 362(B)(3) would allow the HOA to continue its lien perfection not withstanding the automatic stay. That section references section 546 which allows an entity to perfect a lien if, under applicable [state] law, the lien would be superior to the trustee as lien holder. Well, most HOA liens are given super priority.

Let me put it this way, it is not that clear cut that this is a violation, and if your HOA laws are like most states, probably not a violation.

[tobee43]

i agree hhm, as far as i know, and i have only be helping these HOA now a few months,here in florida that is exactly the way it works. that auto stay does not, here anyway, stop the attempt for continuing to collect against the lien.

but past experience, at least with the HOA's i have been working with , have been having little or no luck collecting against those liens from the previous owners.

[justbroke]

I think it depends on what the state of the HOA fee arrears are at the time of filing. While HOAs have super-liens in Florida, I don't think the BK laws allow them to continue the collection effort without relief from the stay. Yes, they can perfect their lien, but they don't need to do that in Florida since the lien is statutory (exists by law on Jan 1 of each year).

I was responding from the position of them actually pursuing efforts while the stay is in place irrespective of any perfection of a lien.

[tobee43]

jb, understood, so far, our HOA has not ever pursued anyone while a stay is in place. thus far, the only pursuit has been way after the stay has been lifted and most previous owners have left town for greener pastures or where it actually RAINS.

[IamOld]

Guys then a question if I may - in a Ch 13 where the HOA dictators are to be paid in full for arrears (around $550) - can they collect on the PAST due balance for which they are provided to be paid in full in the Ch 13???

[tobee43]

Guys then a question if I may - in a Ch 13 where the HOA dictators are to be paid in full for arrears (around $550) - can they collect on the PAST due balance for which they are provided to be paid in full in the Ch 13???

i'm not a "13" person, however, i know this HOA under a 13 would attempt to collect on the past due amounts from the owner and especially, if the home didn't get forclosed on. i'm sure a 13 person will chime in on their experience.

[justbroke]

Guys then a question if I may - in a Ch 13 where the HOA dictators are to be paid in full for arrears (around $550) - can they collect on the PAST due balance for which they are provided to be paid in full in the Ch 13???

No they can't do this if it is included in the Plan of Reorganization. In other words, the Plan allows the debtor to "stay" the collection of debts from all creditors including the government for pre-petition debt that is scheduled and included on the Plan.

Think of the Plan as your promise to pay (it actually is). The court backs it up with their powers to "stay" the collection of those debts unless you don't pay as agreed.