Bankruptcy

A Creative Approach to Dealing with HOA Dues During the Gap Period!

By Joseph McDaniel, Esq.

It's a highly complex, technical area of law, and practitioners tend to share their knowledge because, well, they like it when justice is done!

Mind you, justice probably means different things to creditor attorneys and debtor attorneys. And to trustee's lawyers in Arizona, as well.

But I recently posted a rant about HOA Dues that are not discharged because they came due after the bankruptcy filing and before the house was taken back by the bank in a trustee's sale or foreclosure.

And I hate it that such HOA dues are not dischargeable for the remarkably simple reason that HOAs had good lobbyists when the 2005 Amendments were passed, and folks drowning in overwhelming debt did not!

Funny how that is, you know?

But I got an email from Lonnie McDowell who suggested that if a debtor, just before filing his bankruptcy case, quit-claims his house to his bank, or to the city or state, as applicable, that provides an argument to terminate either HOA dues, or property taxes.

Lonnie McDowell is a smart lawyer in Cottonwood, Arizona, and obviously thinks about his client's well-being, and collects practice pointers.

He shares them, too, which is why he gets today's Tip 'o the Bankruptcy Hat from this Arizona Bankruptcy Attorney!

Now, like all smart lawyers, he doesn't overestimate the power of the quit-claim technique; but Lonnie suggests that if it's not worth a post-petition lawsuit, the technique at least could provide ammo for a "back off" letter to an HOA, and it might even get 'em to back off!

And that would be a good thing!

So thanks for the tip, Lonnie! It's a keeper!

NOTHING HERE CONSTITUTES LEGAL ADVICE RE A CHAPTER 7, CHAPTER 13, CHAPTER 11, OR CHAPTER 12. FIND AN ARIZONA BANKRUPTCY LAWYER WHO IS BOARD CERTIFIED IN BANKRUPTCY LAW, AV RATED, AVVO 10 RATED, ON SUPERLAWYERS, OR JUST VERY EXPERIENCED AND A FORMER CHAIR OF SOME BANKRUPTCY SECTION OR COMMITTEE. NOTHING HERE MAY BE USED AS LEGAL ADVICE IN CONNECTION WITH ANY BANKRUPTCY, WHETHER THAT BANKRUPTCY IS IN PHOENIX, GLENDALE, TEMPE, MESA, SCOTTSDALE, OR ANYWHERE ELSE.

Full post as published by Arizona Bankruptcy Attorney Blog on June 16, 2010 (boomark / email).