California Foreclosed Homeowners Being Hit By Double Jeopardy
A San Jose bankruptcy attorney discusses foreclosure
California is seeing a new trend in lawsuits; Homeowners Associations are suing former homeowners over unpaid association fees on homes that have been foreclosed upon and individuals who have filed for bankruptcy. On top of the association fees already owed, these individuals are being sued for attorney and court fees associated with the lawsuit. One of the ways foreclosed and bankrupt homeowners are getting hit with these fees is that when the bank forecloses on the house, the debtor(s) name(s) are left on the Deed and thus they are liable for the yearly fees.
A bankruptcy filing discharges any homeowner's fees that accrued before the bankruptcy case is filed. The discharge does not release the homeowner for fees for months after the case is filed, for so long as the debtor owns or occupies the residence.
The newly enacted 11 USC 523(a)16 discharges “any debt for a fee or assessment that becomes due and payable after the order for relief to a membership association with respect to the debtor’s interest in a unit that has condominium ownership, in a share of a cooperative corporation, or a lot in a homeowners association, for as long as the debtor or the trustee has a legal, equitable, or possessory ownership interest in such unit, such corporation, or such lot, but nothing in this paragraph shall except from discharge the debt of a debtor for a membership association fee or assessment for a period arising before entry of the order for relief in a pending or subsequent bankruptcy case . . . .”
The new language being “as long as the debtor or the trustee has a legal, equitable, or possessory ownership interest” is what triggers the liability.
If you have questions regarding Bankruptcy in San Jose please contact us at 408.279.2288 for a free consultation or visit www.bkanswers.com and we can connect you with one of our experienced San Jose Bankruptcy Attorneys. After you have spoken with one of our downtown San Jose bankruptcy attorneys, we can schedule you for a free face to face appointment in an office location nearest you. Our team of San Jose Bankruptcy Lawyers can assist you with all aspects of your bankruptcy or bankruptcy litigation case. If you have questions about filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, or would like to learn more about bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, asset protection, discharging a debt, etc. we can help! We have bankruptcy attorneys located throughout California and Oregon who can assist you with all of your debt resolution questions. Please feel free to complete our free online bankruptcy evaluation and we can quickly determine if you are a qualified candidate for bankruptcy. We look forward to hearing from you, San Jose and the South Bay!
