In either case, the HOA is attempting to collect the quantity of money you owe them for using their services (whatever they may be). Due to the fact that you have been unable to pay them for whatever reason, they are now attempting to prosecute you and request that your property be sold at auction to cover the unpaid fees. Even if the arrears are only a few hundred or a few thousand dollars, it is quite simple for creditors to force a foreclosure on a large asset such as a home; do not relax just because the HOA fees are so small.
The filing of bankruptcy halts the collection of any debts included in the bankruptcy petition until the debts are discharged or a court-approved payment plan is initiated. Therefore, the HOA must cease all collection efforts if you file for Chapter 13 bankruptcy and include your HOA debt in your petition. You are seeking legal protection from your creditors, and while the matter is before the bankruptcy court, all of them, including the Homeowners Association, must cease all collection efforts.
Consequently, the HOA is pursing foreclosure against you to collect a debt owed to them. Filing for bankruptcy will force them to suspend the foreclosure process until you reach an agreement. In most cases, you will be required to enter a 3 to 5 year payment plan with the court in order to repay delinquent fees. If you complete the plan, you will not have to worry about them foreclosing on your home because you will have repaid any delinquent payments. Not being delinquent eliminates the possibility of foreclosure.
However, if you fall behind on your bankruptcy payments, the HOA can remove the debt from the filing, have the automatic stay lifted, and resume foreclosure proceedings from where they left off prior to the bankruptcy. In addition to the portion you are paying through the court's payment plan, you will also be responsible for your regular HOA dues. Therefore, it is a waste of time and severely detrimental to your credit to file Chapter 13 if you cannot afford the regular payment plus a portion of your arrears.
You should likely consult with an attorney or other financial advisor to ensure that you are doing everything correctly and create a budget to avoid falling behind on the payment schedule. Although it is possible to file for bankruptcy on your own, there are numerous reasons why it may be preferable to seek legal counsel during this potentially distressing time. Situations involving foreclosure, whether from the original lender or another party such as the HOA, almost necessitate the assistance of a third party, if only to ensure that you have been as careful as possible and that your solution will not be tossed out on a technicality.
" - https://www.affordablecebu.com/
