December 17, 2017

Can my Homeowners Association (HOA) force me into Foreclosure?

This video of a Charlotte, NC family being foreclosed upon by their homeowners association (HOA)  is a cautionary tale illustrating the power of HOAs and is one reason I wrote this Primer for Distressed Homeowners.

Primer for Distressed Homeowners (pdf)

If you are facing a foreclosure by your homeowners association, or are substantially behind on HOA dues and have concerns about how to resolve this, you are not alone and a bankruptcy filing may be a viable solution. A story in The Charlotte Observer last fall reported:

The issue reaches far in North Carolina, with about half of the homes and condominiums in the state falling under the purview of such associations, according to the Homeowners Association of North Carolina, a for-profit group.

“A person can lose their home for being $100 behind or $200 behind,” said Victor Boone, head of the Raleigh office of Legal Aid, a nonprofit agency that offers representation and legal advice for the poor in civil legal matters.

File a bankruptcy case before the foreclosure sale becomes final?

The HOA used the foreclosures as a way to force the owners to pay up.  It often works, and that’s why they do it.  The only alternative to save the property, without negotiating with the HOA, is to file a bankruptcy case before the foreclosure sale becomes final.

The major problem with HOAs is attempting to collect from discharged debtors for post-petition dues accrual when the mortgage companies do not foreclose.  This is a major problem and very difficult to deal with.

If you are facing a foreclosure by your HOA, or are substantially behind on HOA dues and have concerns about how to resolve this, contact a qualified bankruptcy attorney.