Florida Bankruptcy and Home Owner Associations (HOA), What you Need to Know:

The majority of the homes, condominiums (condos), or townhomes in Florida have Home Owner Association (HOA) fees that are usually paid either monthly or quarterly.  A very common question that I receive is what happens to my owed HOA fees when I am filing for bankruptcy, or are my HOA fees discharged (wiped out)  in the bankruptcy?    If the debtor is filing for Chapter 7 bankruptcy in Florida then the answer to those questions depends on whether the debtor is surrendering or keeping their home.

HOA’s in Florida have a great deal of power and can even foreclose on your property for failure to pay dues.   If a debtor, who owns real estate, is filing for bankruptcy then they must inform the bankruptcy court what their intentions are with the property.

Surrender the Property:

If you choose to surrender the property in your Florida bankruptcy filing then it is very important that you list the monies you owe to your HOA on your bankruptcy petition so that you will be able to discharge that debt in the bankruptcy.  Failure to list the debt in your bankruptcy petition could cause the debt to survive bankruptcy.  If you are surrendering the home and you list your HOA dues on your petition then your HOA dues are FULLY dischargeable in your bankruptcy filing.

HOWEVER – one precaution, any HOA dues that are accrued after filing, IE from the time you file your case until the bank takes possession of the home, are technically post-petition charges and the creditor could come after you for those fees.  However it is highly unlikely that they do, as the HOA usually gets their fees paid by the bank upon the bank taking possession of the home.

Retaining the Property:

If you are filing for bankruptcy in Florida and you wish to retain your home then the unpaid HOA dues are non-dischargeable in bankruptcy.  That means you will need to pay the owed HOA dues or there is a chance that the HOA will foreclose on your property.

If you are thinking of filing for bankruptcy and would like to speak with a Florida bankruptcy attorney then please contact Shmucher Law, PL at 954.309.5559 or 305.741.5553.  We offer free consultations in any of our Florida offices (Boca Raton, Fort Lauderdale, Miami, Plantation and Sunrise).

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