It’s not very common, but at least twice a year I have clients face this issue: they surrendered their home in a chapter 7 bankruptcy, and then the HOA sues them for HOA fees which came due after the bankruptcy was filed.
Bankruptcy wipes out your personal liability for those fees which arose prior to the bankruptcy file date. If you’re keeping the home, you’ll still have to pay them back, but if you’re surrendering the home, you do NOT have to pay them back.
The problem is that new HOA fees keep coming due until your name is off the title of the home. (Your names comes off title when they sell or foreclose the property). Your chapter 7 case does not affect these new post-petition fees. The Bankruptcy Code Section 523(a)(16) exempts from discharge any:
(16) 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, for as long as the debtor or the trustee has a legal, equitable, or possessory ownership interest in such unit, such corporation, or such lot, but nothing in this paragraph shall except from discharge the debt of a debtor for a membership association fee or assessment for a period arising before entry of the order for relief in a pending or subsequent bankruptcy case;
In other words, even though you’re giving up the home, the HOA can still come after you for new fees. All you can do is wait until the bank forecloses or the trustee sales the property. Once that happens, your name is off title, and the new title holder will have to pay those fees for you.
I’d like to give credit where credit’s due. I used the following two articles for inspiration here:
HOA dues still due after bankruptcy filing? by Justin Harelik, and
Post-Petition HOA Fees in Bankruptcy, by the Wilson-Goodman Law Group.