Many chapter 7 debtors are unaware that Homeowner’s Association (HOA) dues occurring post-petition are not dischargeable in bankruptcy. According to Section 523(a)(16) of the Bankruptcy Code any “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” is not dischargeable.
HOA dues accrued after a chapter 7 debtor files for bankruptcy are not dischargeable as long as the real property remains legally titled in the debtor’s name. Even if it is the debtor’s intent to surrender the property, he is obligated to pay post-petition HOA dues while the property remains titled in his name. Any fees associated with the collection of post-petition HOA dues, including attorney fees, are also nondischargeable and therefore owed by the debtor. Since a sale or foreclosure can be a long and drawn out process, these dues can quickly add up.