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Homeowners who fall behind on their association dues often worry about lawsuits, foreclosure threats, and whether bankruptcy can provide relief. In this article, we break down…
Florida’s homeowners’ associations can, and often do, sue over unpaid HOA dues. But whether these fees are dischargeable through bankruptcy depends on the situation.
Technically, HOA fees are debts, and most debts can be discharged in bankruptcy. But the real issue is whether the debt is tied to property you intend to keep.
If you’re no longer living in the home, past-due HOA fees can generally be discharged. However, if you plan to remain in the property, it’s a different story. You can’t discharge past HOA fees and expect to stay in the home without consequences.
Many people don’t realize that HOA fees are connected to the property itself. When you don’t pay them, it’s not just a matter of upsetting the association. An HOA can actually foreclose on your home because they have a secured interest tied to the property.
To simplify it:
To explain this, it helps to look at the most common situations where HOA issues arise in bankruptcy.
One scenario is when someone falls behind on HOA fees while still living in the home. Eventually, the HOA files a lawsuit or threatens foreclosure. At that point, the homeowner files bankruptcy, often a Chapter 13, and sometimes a Chapter 7, depending on the amount owed.
Filing for bankruptcy can temporarily stop the lawsuit and buy time. In a Chapter 7, that may give someone a short window to pay the balance quickly. In a Chapter 13, the debt may be repaid over time through a repayment plan.
But the key point is this: the debt still has to be paid if you intend to keep the home.
Another important point is that future HOA dues are not dischargeable. Any fees that come due after your bankruptcy case is filed remain your responsibility.
People often get confused about this because HOA dues work differently from some other obligations. For example, a lease is a contract created on a specific date. If you file bankruptcy after that date, the lease obligation can potentially be discharged.
HOA fees are different because they are recurring obligations. Each billing period creates a new debt. For example, someone might move out of a home that is in foreclosure and assume they no longer owe HOA fees. That’s only partially true. Even if you file bankruptcy and discharge past HOA debt, new HOA fees continue to accrue until your name is removed from the deed.
Because of this, I often tell my clients that if they’ve moved out of a property, they should continue paying HOA dues until they are officially off the title. Otherwise, they may unexpectedly receive a summons from the HOA later on, because associations do pursue those debts.
Surrendering property in bankruptcy can be misunderstood. When you surrender property in bankruptcy, you are essentially stating your intention to give it up. However, the bankruptcy court does not actually take the property.
In most cases, the property still goes through the normal foreclosure process. If the home has no equity, the bankruptcy trustee typically has no interest in it. That means you’re still waiting for the mortgage lender to complete the foreclosure process.
In Florida, that process can take a long time. Foreclosure cases are being filed frequently, and many take more than a year to complete. So even if you move out of the house and surrender the property in bankruptcy, you may still remain responsible for HOA fees that come due until the property is officially out of your name.
If you want to keep your home, the most important thing to understand is that your HOA fees must be paid. If you’re behind on payments, you need to figure out how to catch up. The right approach will depend on your financial situation and the amount owed.
Some people may be able to resolve the issue quickly without filing Chapter 13. Others may need a Chapter 13 repayment plan to catch up on the past-due balance over time. But one thing is certain: if you do not catch up on your HOA fees, the association can eventually foreclose on your property. Bankruptcy alone will not allow you to keep your home unless the HOA debt is addressed.
The most important thing to understand is that filing for bankruptcy usually provides temporary relief. When you file bankruptcy to stop a lawsuit involving property, whether it’s related to a mortgage, a car loan, or HOA fees, you are essentially stopping the immediate problem. But that doesn’t mean the issue disappears permanently.
Eventually, the creditor or the HOA can file motions that allow the case to move forward again unless you present a solution. That solution might involve catching up on the debt through a Chapter 13 repayment plan or resolving the issue another way.
In other words, bankruptcy can stop the immediate pressure, but it works best when there is a clear plan for how the situation will ultimately be resolved.
For more information on how bankruptcy stops HOA lawsuits in Florida, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (407) 255-7458 today.
Alec Solomita of Solomita Law, PLLC has extensive experience helping Florida homeowners address debt issues involving mortgages, HOA disputes, foreclosure threats, and bankruptcy filings.
He regularly works with clients facing lawsuits from homeowners’ associations and understands how bankruptcy can and cannot protect property owners in these situations. By helping clients evaluate Chapter 7 and Chapter 13 options, Alec Solomita has guided many homeowners toward solutions that protect their finances and clarify their obligations moving forward.
If you’re facing an HOA lawsuit or falling behind on association dues, reach out to Solomita Law, PLLC to explore your legal options today.
