Bankruptcy/ chp 13 question?

Develop and record with the registry of deeds a schedule of collection milestones for defaulting homeowners. Any board member who does not follow the schedule for all homeowners, will be neglecting their duty and subject to dismissal and/or lawsuits by other homeowners.

30 days - notice
60 days - penalty
90 days - lien
120 days - hand over to lawyer
190 days - foreclosure suit filed

Fiona

I am not nor do I play a lawyer.

I am confused. Was it legal advice from the PM? Also if an HOA has a plan of action, what concern is it of theirs what the financial action of the non dues payer is? Maybe I am missing something but my advice is file what you normally file.

If for some reason this (or any) late dues payer starts sending in payment. So what? Record them and move on as you would from any late dues payer.

I say neither the PM nor your BOD is the Bankruptcy Court and should not be acting as such "with rulings".

As I said, what am I missing?

You are absolutely correct. I am not sure but I would think that the debt owed to the HOA would have already been filed with the petition for bankruptcy?

Bankruptcy laws vary by State.
My mother had to declare bankruptcy when my father died.
You do need permission of the court. However, the member can Reaffirm a debt and resume responsibility for it.

If your member and the Association is willing to do this, I would suggest that the Association has an attorney draw up the necessary paperwork and see if the court allows it.

I found the following information on another site. Written by Stephanie Lane:

Generally, HOA dues that accrued pre-petition are treated as secured claims so long as the home is titled in your name. This is because most states allow unpaid HOA dues to be reduced to liens on your property. Consequently, your Chapter 13 plan must provide for payment to the HOA claim. The pre-petition HOA claim may be treated differently depending on whether you keep or surrender the home: If you intend to keep the home, the pre-petition HOA dues must be paid 100% in the plan (with exceptions discussed below). If you intend to surrender the home, the pre-petition HOA dues may be treated as an unsecured claim in your Chapter 13, but the HOA may still execute on its lien outside of bankruptcy. Your personal liability on the pre-petition HOA dues (to the extent they are not satisfied from the foreclosure sale or other disposal of the property) would be discharged upon completion of your Chapter 13.

Post-Petition HOA Fees
In a Chapter 7 bankruptcy, post-petition HOA fees are not dischargeable. You would remain personally liable on post-petition HOA fees, until such time as the property is sold or transferred. However, in a Chapter 13 bankruptcy, post-petition HOA fees may be dischargeable, depending on the laws of your state. The HOA may still have a claim against the property. This may make a difference to you if you retain or surrender your home in a Chapter 13.

Keeping the Home
If you intend to keep your home in a Chapter 13, you should continue to pay HOA fees as they become due and payable post-petition. You would do this by paying the HOA directly or through your Chapter 13 plan. If you do not pay the HOA dues post-petition, then those dues will attach to the home as any other lien. They may also not be discharged, depending on whether your bankruptcy court treats the continuous assessments as a pre-petition (rather than post-petition) claim.

Surrendering the Home
Bankruptcy laws vary on how to treat the post-petition HOA dues if you decide to surrender the home in a Chapter 13. Some bankruptcy courts may allow you to discharge the post-petition HOA dues upon completion of your Chapter 13 plan. This means you would not be personally liable for payment of those dues. However, the HOA may be allowed to retain an interest in the property as a secured creditor to the extent of its lien for the HOA fees and costs. That means it can pursue its lien through foreclosure.

Other bankruptcy courts will not discharge the post-petition HOA dues. You may still remain liable for those fees until the home is actually sold or transferred out of your name.

Exception: Avoiding an HOA Lien?
You may be able to avoid or reduce the amount of the HOA's secured claim if the bankruptcy court treats it as a statutory lien. This is important because statutory liens in a Chapter 13 can be avoided or stripped down to the extent they impair your equity in the property. This option is not available in every district, as bankruptcy courts disagree as to how to treat HOA secured claims.

Claims Issues: Attorney Fees and Other Charges
If the HOA files a proof of claim, it will probably include extra fees and charges in addition to the normal dues. You may be able to object to those fees and charges, depending on whether or not the HOA is legally entitled to those charges under the laws of your State.

State laws vary on whether a homeowners association can collect attorney fees and other charges from you. In many states, HOAs are allowed to charge you attorney fees. As a general rule, if the HOA by-laws and/or articles allow attorney fees, late fees and other charges, then you are on the hook for those charges. Your state's statutes may also allow the HOA to charge you these fees even if the by-laws or articles don't say so. But that does not mean this right is open-ended. Usually, HOA attorney fees must be “reasonable.”

Even if the HOA is legally permitted to assess those fees and charges, bankruptcy courts are courts of equity. This means that they may have more flexibility in determining how much you would have to pay based on issues of fairness. If you believe that the HOA's claim includes illegal or unfair fees and charges, you may be able to object to its proof of claim.