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How Bankruptcy Can Protect an Individual from Their Home Owners’ Association

When people are in serious debt, oftentimes, their utmost concern is keeping their home. If your Home Owners’ Association is coming after you, filing for bankruptcy may be your best bet. Please read on and reach out to our experienced New Jersey bankruptcy attorney to learn more about how we can help you through the legal process going forward:

What Is the Function of A Home Owners’ Association?

Home Owners’ Associations are responsible for ensuring individuals make their homeowners’ dues and assessments on time. When people fail to make these payments in a timely manner, their Home Owners’ Association will most likely begin coming after them. Rather obviously, this is an extremely frightening experience for all homeowners. If your Home Owners’ Association places a lien on your house for the amount of debt you owe, you may find yourself financially underwater. Unfortunately, as the debt grows, the lien does too. If you cannot afford to pay off the lien placed on your home, you will most likely have to file for bankruptcy.

However, it is worth noting that in certain situations, people are unable to discharge HOA debt that comes due after filing for bankruptcy. By hiring an experienced bankruptcy attorney, you will ensure you are filing at the right time and that you have all the documentation you need to properly file for bankruptcy.

Can Filing for Chapter 7 Bankruptcy Protect Me from My Home Owners’ Association?

Oftentimes, if you are someone who is not too deep in debt, you may keep your home by filing for Chapter 7 bankruptcy. Chapter 7 bankruptcy discharges most of your unsecured debts, which may provide you with enough financial means to pay off your lien. However, Chapter 7 bankruptcy does not directly discharge the lien on your home, which is why people who are farther in debt will generally file for Chapter 13 bankruptcy.

Is Filing for Chapter 13 Bankruptcy Best for Protection from My Home Owners’ Association?

If you are very deep in debt, our attorneys will inform you that Chapter 13 may be your best bet. In Chapter 13 bankruptcy, you and your attorney will formulate a 3-to-5-year payment plan. This plan will inform all creditors how you will pay off your HOA debts. When you file, an Automatic Stay will go into effect, which should stop your Home Owners’ Association all collection activities.

Contact Our Experienced New Jersey Firm

Juan C. Velasco, Esq. is a trusted attorney who concentrates on bankruptcy, family law, real estate, and estate matters who has been serving the New Jersey area for over 25 years. If you need experienced legal counsel, please contact Velasco Law Office and we will be happy to assist you.