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BankruptcyLawyerHonolulu: Getting rid of Homeowner Assoc Fees post BAPCPA

Updated on April 2, 2011

Post BAPCPA - In the 9th Circuit HOA fees can be discharged in a Chapter 13 but only if you are surrendering your home

After BAPCPA, 11 U.S.C. Section 523(a)(16) provides that homeowner’s association fees that become due and payable post petition are non-dischargeable under section 11 U.S.C. Section1328(b). This section applies in a Chapter 13 where debtor fails to complete plan and wants an early discharge due to hardship. If the Debtor is seeking a discharge under section 1328(a) (chapter 13 where debtor is current on plan), that section does not except from discharge post-petition homeowner's association fees. Accordingly, in certain situations a Chapter 13 debtor who is current on plan payments maybe protected from the HOA, who has to file their proof of claim in order to be paid. This ruling however may only be applicable in the 9th circuit for now. In a post BAPCPA and a Ninth Circuit case, In re William Joseph Kelly (Case No. 09-42376, U.S. Bankruptcy Court, N.D. Ca. 2010) [see for this court case], the bankruptcy court held that the association was prohibited from going after the debtor personally for the post petition homeowner assessments. The debtor’s Chapter 13 plan provided that debtor would surrender the property and pay its general unsecured creditors on a pro tanto basis. The mortgage lender in that case, Chase Bank filed and obtained an order granting its motion for relief from stay as holder on the first deed of trust. Chase Bank had not yet foreclosed on the property when the association filed its motion for relief from the automatic stay in order to record a lien against the real property foreclose on their lien as well as to file a lawsuit against the debtor personally to collect unpaid homeowner’s assessments. The association alleged that the debtor owed $5,537.26 in post- petition assessments. The debtor did not oppose the associations request for relief from stay to record their lien against the Property and foreclose, but did disagree that they owed the association its post petition fees (alleging that the association only had an unsecured pre-petition claim). The court agreed with the debtor and held that the association could not pursue the debtor personally for the unpaid homeowner’s assessments, as the association only has an unsecured pre-petition claim. 11 U.S.C. Section 523(a)(16) provides that homeowner’s association fees that become due and payable post petition are non-dischargeable under section 727, 1141, 1228a 1228b, or 1328(b) (emphasis supplied). Debtor sought a discharge instead under section 1328(a) which does not except from discharge post petition homeowner’s association fees. "... section 1328(a) provides for discharge of all debts provided for by the plan or disallowed under section 502", said the court. Debtor’s confirmed Chapter 13 plan provides for this debt by indicating that Debtor will surrender the Property, and by making payments to the Chapter 13 trustee of $900 each month to be distributed on a pro rata basis to general unsecured creditors, such as the association. The court cited to In re: Mattera (which had been decided pre BAPCPA) and stated that the pre-petition and post-petition homeowner’s assessments were discharged by the debtor’s successful completion of a Chapter 13 plan. The court reasoned that post-petition assessments were pre-petition claims and that the debtor’s Chapter 13 plan provided for the claim by stating the debtor’s intention to surrender the condominium.

Written by Brian Kawamoto, Attorney

Attorney Brian Kawamoto is an experienced bankruptcy and tax attorney in Honolulu, Hawaii. His practice includes filing consumer bankruptcy cases, both Chapter 7 and 13.


It is advised that you consult a bankruptcy attorney or lawyer in your state when dealing with your individual situation as the bankruptcy laws are complex and changes from time to time, also every state has different laws, rulings and court decisions as it concerns bankruptcy matters.. Statements made here reflects the author's viewpoint for general reading purposes only and therefore should not be relied upon or considered as a legal opinion or legal advice for your own particular factual situation. Each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and docum


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