If you are behind on homeowners association dues and considering bankruptcy, one of the first questions you probably have is whether those HOA dues will be discharged. The answer depends on several factors, including whether you file Chapter 7 bankruptcy or Chapter 13 bankruptcy, whether you intend to keep your home, and whether the dues were incurred before or after your bankruptcy filing.
HOA dues work differently in bankruptcy than credit card debt or medical bills. An HOA can place a lien on your property, and in Florida, that lien may have special priority. Understanding how the process works before you file can help you make informed decisions about your home and your case.
If you are facing HOA debt alongside other financial pressures, our Florida bankruptcy attorneys can review your situation and explain what options may be available.
HOA Dues and Bankruptcy in Florida
In Florida, homeowners association dues are not just a bill you can ignore. Under Florida Statute 718.116 for condominiums and Florida Statute 720.308 for homeowners associations, a unit owner is liable for all assessments that come due while they own the property. The association can also record a lien against the property to secure payment of those assessments.
When you file for bankruptcy, the automatic stay stops most collection activity, including HOA collections. But the stay is temporary. What happens to your HOA dues after filing depends on the type of bankruptcy you choose and what you plan to do with your property.
Chapter 7: Surrendering vs. Keeping Your Home
In a Chapter 7 bankruptcy, the treatment of your HOA dues depends on whether you keep or surrender your home.
If You Surrender Your Home
If you decide to surrender your home in Chapter 7, you may be able to discharge some or all of the HOA dues that accrued before you filed. Once you surrender the property and the bankruptcy is complete, you are no longer the legal owner. Any pre-petition HOA assessments that were dischargeable debts should be eliminated along with your other qualifying debts.
However, you remain responsible for HOA dues that accrue after your filing date until the property is actually sold or transferred out of your name. If the sale takes months, those post-petition dues continue to accumulate. This is one reason why timely communication with your attorney about the status of the property matters.
If You Keep Your Home
If you intend to keep your home in Chapter 7, you will almost certainly need to continue paying your HOA dues, including any amounts you were behind on when you filed. Chapter 7 does not provide a mechanism to catch up on missed HOA assessments over time. You must bring the account current to avoid foreclosure by the HOA.
The Statement of Intention you file in Chapter 7 will indicate whether you plan to retain or surrender the property. If you choose to retain, the HOA will expect ongoing payment, and the automatic stay will eventually lift, allowing the HOA to resume collection efforts if you fall behind.
Chapter 13: Paying HOA Dues Through a Repayment Plan
Chapter 13 bankruptcy works differently because it allows you to catch up on missed debts through a court-approved repayment plan over three to five years.
If You Keep Your Home
If you keep your home in Chapter 13, the HOA dues that accrued before filing must generally be paid in full through your repayment plan. This is one of the advantages of Chapter 13 for homeowners who are behind on assessments. You can spread the pre-petition balance over the life of the plan while continuing to pay current dues on time.
Post-petition dues must also be paid as they come due. If you fail to pay post-petition assessments, the HOA can place a lien on your property and potentially pursue foreclosure even while your Chapter 13 case is active.
If You Surrender Your Home
If you surrender your home in Chapter 13, the treatment of post-petition HOA dues can vary depending on the court and the circumstances of your case. Some courts allow post-petition dues to be discharged upon completion of the plan. Others require the debtor to remain responsible for ongoing assessments until the property is transferred.
This is an area where Florida bankruptcy law can be nuanced. A local attorney who understands your court’s practices can help you understand what to expect.
Pre-Petition vs. Post-Petition HOA Dues
The distinction between pre-petition and post-petition HOA dues is critical in bankruptcy:
| Timing | Definition | Treatment |
|---|---|---|
| Pre-petition | Dues that accrued before your bankruptcy filing date | May be dischargeable depending on whether you keep or surrender the property |
| Post-petition | Dues that accrue after your filing date | Generally not dischargeable; you remain responsible until the property is sold or transferred |
Pre-petition dues are the amounts the HOA billed you for before you walked into the attorney’s office. Post-petition dues are everything that accumulates after that date. Even if you surrender your home, post-petition dues remain your responsibility until the property changes hands.
How HOA Liens Work in Florida
Florida HOAs and condominium associations have significant power to collect unpaid assessments through liens. Understanding how these liens interact with bankruptcy is important.
Condominium Liens Under §718.116
For condominiums, the association has a lien on each unit to secure payment of assessments. This lien is effective from the recording of the original declaration of condominium. As to first mortgages of record, the lien is effective from and after recording of a claim of lien in the public records.
First mortgagees who acquire title through foreclosure are liable for the lesser of:
- 12 months of unpaid assessments, or
- 1% of the original mortgage debt
This means the HOA can pursue the homeowner for the full pre-petition balance in bankruptcy, but the mortgage lender’s liability is limited.
HOA Liens Under §720.308
For homeowners associations, the lien provisions are generally different from condominiums. HOA liens may not have the same super-priority over mortgages that condominium liens can have. The specific rights depend on the governing documents of the association and the timing of the lien.
The Automatic Stay
When you file for bankruptcy, the automatic stay stops the HOA from foreclosing on its lien. However, the stay is temporary. If you do not address the HOA debt in your bankruptcy case, the HOA can resume collection efforts once the stay is lifted.
What to Expect From Your Attorney
When you meet with a bankruptcy attorney about HOA dues, they will likely ask about:
- Whether you own a condominium or a home in an HOA community
- How much you owe in back assessments
- Whether the HOA has recorded a lien against your property
- Whether you want to keep or surrender your home
- Whether any HOA foreclosure proceedings have already begun
- Your other debts and overall financial picture
Based on that information, your attorney can recommend whether Chapter 7 or Chapter 13 is a better fit and help you understand what will happen to your HOA dues in either scenario.
When to Talk to a Bankruptcy Attorney
Consider speaking with a bankruptcy attorney if you are behind on HOA dues and:
- You are receiving collection letters or lien notices from your HOA
- The HOA has threatened or initiated foreclosure
- You are considering bankruptcy and want to understand how HOA debt will be treated
- You are not sure whether to keep or surrender your home
- You are already in bankruptcy and have questions about post-petition HOA assessments
HOA dues are a common concern in Florida bankruptcy cases. They are dischargeable in some situations, but the rules are specific and the outcome depends on your choices. The sooner you understand your options, the better positioned you are to protect your home and your financial future.
If you are dealing with HOA debt and other financial pressures, contact Dellutri Law Group for a confidential consultation. We can review your situation, explain how bankruptcy may affect your HOA dues, and help you decide on the right path forward.
This article provides general information about Florida bankruptcy and HOA law and is not legal advice for any specific situation.
