Understanding HomeOwners Association (HOA) and Condominium Foreclosure In New Jersey
In New Jersey, if you live in a condominium, townhome or a single family home that is part of a common interest development, you most likely have to pay dues and assessments to a condominium association (COA) or a homeowners’ association (HOA). Falling behind on your dues or assessments can cause a lien to be placed on your home, which is usually spelled out in the covenants, conditions and restrictions, or bylaws and is referenced in your deed. However, you must receive written notice that the lien has been filed. This can lead to a foreclosure of the lien, if you remain behind on your payments.
The lien may be foreclosed in order to get you out and gain control of the property or to try to push you into paying the delinquency. If they foreclose, any mortgages may remain on the property, but they can take possession and rent out the unit to collect their fees.
What Happens to HOA Dues and Liens if I File for Bankruptcy?
Filing for bankruptcy can allow you to discharge your liability for the unpaid dues that were accrued pre-bankruptcy. You have the right to file for Bankruptcy, as provided by federal law. In most circumstances, upon the filing of a Bankruptcy Petition, you will be entitled to the “Automatic Stay” which is an automatic injunction that halts the Sheriff Sale and other actions by creditors. In order to fully understand your options concerning Bankruptcy, you should seek a consultation with an experienced bankruptcy attorney to determine whether it is an option for you, and what you need to do to be prepared to stop a Sheriff Sale. However, a bankruptcy does not automatically remove the lien.
You also need to be aware that bankruptcy only affects the past due amounts. You are still responsible for monthly dues. Even if you intend to surrender your property in the bankruptcy, dues will continue to pile up while you wait for the bank to take the property. If these fees are not paid, then the association may look to sue you personally in order to collect.
Bankruptcy Is Not Necessarily the Right Solution
It is important to note that filing for bankruptcy is not the best option for every situation, and you should consult with an experienced Bankruptcy Attorney to see if Bankruptcy makes sense for you. This office does NOT file Bankruptcies, but if you need help with impending foreclosure or you are looking for guidance on obtaining a loan modification prior to, or after bankruptcy, contact the law firm of Ira J. Metrick today so we can discuss your situation.