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Posted By PatriciaH4 on 08/09/2013 6:48 AM
I know we have to get the HOA attorney involved if someone files bankruptcy as a Proof of Claim has to be filed. Whatever is on the books at that time is what is paid by the filer - however, it does come in in dribs and drabs (we're talking checks in the amount of 15, 25, 33 dollars).
It's a bit of a vicious cycle as the attorney gets copies of all communications from the bankruptcy court, which of course, they charge for reviewing, which ends up getting added onto the homeowner's account, and then when they come out of bankruptcy, either the attorney has to file for the additional charges through the bankruptcy court or start up new collection procedures.
The HOA I work with has taken a lot of business back from the attorney to try to work with homeowners without racking up some of their obscene charges. Unfortunately, there are times when the attorney is necessary as the last course of action.
Very frustrating to see how quickly the legal fees add up, and for those who are obviously already having difficulty. But I guess that's another post!
True, but on the other hand there are people who use the bankruptcy court for all it's worth to avoid paying anything by buying some time. To whit, a homeowner in our community (a long time deadbeat) declared chapter 13 bankruptcy, but never made an attempt to pay anything - even the trustee got sick of her. We ended up asking for (and getting) a relief from stay, which removed bankruptcy protection from the house so we could do our own foreclosure. The judge even warned the mortgage company attorneys that the clock was ticking and they needed to make some sort of move -
we'd hoped the mortgage company would have done their own foreclosure and saved us some money, but instead, it appears they did some sort of loan modification or something where she stayed in the house still not paying HOA fees)
We proceeded with our own foreclosure but the day before the sheriff's sale, guess who filed chapter 13 AGAIN? This time, she swears she wants to pay, and despite a letter from the board addressed to the judge explaining why we were objecting to the protection, he's decided to give her 60 days to come up with some sort of plan. We may still get our motion in the end - but may also wind up going through the no effort to pay merry go round again.
Make sure your association has a proof of claim filed with the court and have your attorney argue for getting every dime. After all, the money your association spent in pursing the homeowner would amount to little more than a gift if the judge disallows the attorneys fees (which some have done.) You can also pursue post petition fees (fees that accumulate after the bankruptcy is filed - those are fair game), but you'll need to consider the pros and cons very carefully before making a decision.
If it is not right do not do it; if it is not true do not say it. Marcus Aurelius