How HOA Fees and Assessments Are Treated in Bankruptcy

Homeowners’ associations in Georgia have strong powers to enforce payment of fees and assessments, including the ability to file liens, pursue lawsuits and in some cases initiate foreclosure. When dues go unpaid, late fees, interest and attorneys’ fees can accumulate, turning a small delinquency into a major financial problem. This can add to the woes of homeowners already struggling with mortgage payments and other debts, 

Filing for bankruptcy can provide meaningful relief, starting with the automatic stay. Immediately upon filing, the stay stops collection efforts by creditors. Lawsuits, lien enforcement, garnishment attempts and foreclosure actions must halt. This pause gives homeowners breathing room to evaluate their options and prevents the HOA from taking further legal action while the bankruptcy case proceeds. 

Bankruptcy treats past-due HOA fees and assessments differently from future dues. In a Chapter 7 bankruptcy, outstanding balances owed up to the date of the filing are generally dischargeable. If a homeowner intends to surrender the property, the discharge eliminates personal liability for those old assessments. But if the homeowner wants to keep the property, they must stay current on new dues because the HOA can resume collection efforts once the case ends.

For debtors hoping to keep their home, Chapter 13 bankruptcy provides the most comprehensive protection by allowing inclusion of HOA arrears and mortgage debt in a single repayment plan. This lets the debtor catch up gradually over three or five years while maintaining protection from lawsuits and foreclosure.

However, bankruptcy does not discharge dues that arise after the filing date. These ongoing assessments are tied to property ownership. Staying current on new dues is essential to avoid fresh collection activity and to maintain the protections of Chapter 13. As long as the homeowner continues paying new fees and assessments as they come due, the HOA cannot pursue collection during the life of the plan.

For Georgia homeowners facing HOA pressure, a few practical steps can make a significant difference. Reviewing the association’s governing documents helps clarify the HOA’s rights and the potential consequences of delinquency. Staying current on new dues, even when behind on old ones, prevents additional penalties and keeps the homeowner in good standing. 

At Jeff Field & Associates, we help homeowners throughout Georgia discharge or manage debt through Chapter 7 or Chapter 13 bankruptcy. We have convenient locations in Bogart, Decatur, Douglasville, Gainesville, Lawrenceville and Marietta. Contact us online or call 404-381-1278 for a free initial consultation.