Behind on your owners dues? Homeowners lawsuits Texas can result in a foreclosure of your homestead. The fees charged by the homeowners associations attorneys are usually very high. I encourage you to attend meeting and make sure you get disclosure as to the law firm your homeowners hires. In a bankruptcy chapter 13 if there is little to no equity in your home, you can strip the homeowners and treat them as a unsecured creditor. You may think this is payback for all the grief they cause you. Should you attempt to stay out of bankruptcy, the homeowners are first required to file suit before they foreclosure. Normally the lawsuit is filed the district court in the county that the property is located. Once a order of sale is received, they can post you on the next 1st Tuesday of the month. provided they have given at least 20 days notice. You have a short redemption period after the sale to get the property back. It may be possible to file a bankruptcy after the sale and pay the buyer out in a chapter 13 bankruptcy. I would say that this is risky and best to file a chapter 13 bankruptcy prior to the sale. The following language is used to strip the HOA in a chapter 13 bankruptcy which has been taken from http://www.txs.uscourts.gov/bankruptcy/rulesformsproc/
C. The following table sets forth the treatment of certain classes of secured creditors holding a claim secured only by a security interest in real property that is the Debtor(s)’ principal residence. The Debtor(s) allege that the total amount of debt secured by liens that are senior in priority to the lien held by __________________ exceeds the total value of the principal residence. Accordingly, the claim will receive (i) no distributions as a secured claim; and (ii) distributions as an unsecured claim only in accordance with applicable law.
Upon the Debtor(s)’ completion of all payments set forth in this plan, the holder of the lien is required to execute and record a full and unequivocal release of its liens, encumbrances and security interests secured by the principal residence and to provide a copy of the release to the Debtor(s) and their counsel. Notwithstanding the foregoing, the holder of a lien that secures post-petition homeowners’ association fees and assessments will be allowed to retain its lien, but only to secure (i) post-petition assessments; and (ii) other post-petition amounts, such as legal fees, if such other post-petition amounts are (x) incurred with respect to post-petition fees and assessments; and (y) approved by the Court, if incurred during the pendency of the bankruptcy case.
|Name of Holder of Lien to which this provision applies|
|Address of Principal Residence|
|Debtor(s)’ Stated Value of Principal Residence||$__________________________|
|Description of all Liens Senior in Priority (List Holder and Priority)||Estimated Amount Owed on This Lien|
Total Owed—All Senior Liens
This paragraph 4C will only be effective if the Debtor(s) do each of the following:
Eric Southward is the managing attorney at Busby & Associates Attorney and Counselors at Law P.C. He has 14 years of bankruptcy practice behind him which include over 5,000 bankruptcy cases he has prosecuted for families, small business, and individuals.
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