One of the main reasons AZ residents file for bankruptcy is overwhelming debt that includes their home. Whether people are trying to get out from under mortgage liabilities through Chapter 7 bankruptcy or looking to save their home by filing a Chapter 13 bankruptcy payment plan, a home is a significant part of the decision about which bankruptcy chapter to file.
With most homes in Phoenix and Scottsdale, Arizona, there are Homeowner’s Association (HOA) dues, a monthly obligation that helps run the neighborhood’s operations for needs such as landscaping, maintaining recreational facilities, providing security, and sometimes even exterior home maintenance.
Many Phoenix and Scottsdale residents whose homes are part of the bankruptcy process are behind on their HOA obligations too. While you might be able to discharge dues that are outstanding WHEN the bankruptcy is filed, you are still responsible for the ongoing dues that accumulate AFTER the bankruptcy filing. HOA dues are covered by a separate contract than a mortgage, and you are still responsible for dues up until foreclosure even if you have already left the home. It can take several months or more for banks to complete the foreclosure or resale process. Until the bank or a new homeowner becomes legally responsible for the property, you are still the owner, still liable under the HOA contract, and the homeowners association will continue to try to collect dues from you.
The bankruptcy attorneys of The Frutkin Law Firm, PLC in Phoenix and Scottsdale, Arizona, encourage clients to contact the HOA management company directly to discuss their options after the foreclosure or short sale is complete. HOAs will often negotiate with former homeowners on the amount of post-bankruptcy HOA dues that must be paid to avoid a collection lawsuit.
Tags: Arizona, AZ, bankruptcy, bankruptcy attorneys, bankruptcy filing, bankruptcy in Phoenix Arizona, bankruptcy process, foreclosure, Frutkin Law Firm, HOA dues, Homeowner's Association, Phoenix, Scottsdale, short sale