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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 17885
Experience:  B.A.; M.B.A.; J.D.
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I live in California but recently had a foreclosure on a rental

Resolved Question:

I live in California but recently had a foreclosure on a rental home in Arizona. Before the foreclosure, I was trying to short sale the home. During that time I was being assessed fines by the HOA for not keeping the grounds presentable. The HOA is now trying to collect on the $3500 worth of fees post foreclosure through a collection service. Am I responsible for these fees or can I just claim bankrupcy? If I claim bankrupcy, do I run in to difficulty with my other homes, credit card, taxes, etc. or does it just extend my bad credit a few years past my foreclosure?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  Phillips Esq. replied 5 years ago.
Thank you for giving me the opportunity to assist you. I encourage you to ask me for clarification, if you are not clear with my Answer.


Question: I live in California but recently had a foreclosure on a rental home in Arizona. Before the foreclosure, I was trying to short sale the home. During that time I was being assessed fines by the HOA for not keeping the grounds presentable. The HOA is now trying to collect on the $3500 worth of fees post foreclosure through a collection service. Am I responsible for these fees


Response 1: No, you are not. The new owner is now responsible for the fees. This is the risk a purchaser at foreclosure takes. The HOA should not be sending you a bill post foreclosure because you no longer have ownership interest on the property. So, you should send a simple dispute of debt letter to the collection agency disputing the validity of the debt.


or can I just claim bankrupcy? If I claim bankrupcy, do I run in to difficulty with my other homes, credit card, taxes, etc. or does it just extend my bad credit a few years past my foreclosure?

Response 2: The debt is not yours. So, if you are filing for protection because of it, then you should not file for bankruptcy. If you do decide to file for bankruptcy your other assets may be affected if you cannot exempt all the assets. Exempt assets mean assets that creditors cannot reach to satisfy your debts to them. Any assets that are not exempt would be taken by the bankruptcy trustee and sold to distribute proceeds to your creditors.


In California, there are two Exemption Schemes: Section 703 and 704. You can claim exemptions on either but not both. So, you have to review the exemptions and choose the Scheme that you would offer more protection for your assets:


http://www.moranlaw.net/703.htm


http://www.moranlaw.net/704.htm

Customer: replied 5 years ago.

Just to make sure..... the fines that were assessed to me was during the year I was trying to short sale my home, so it had not been foreclosed yet. The home after foreclosure was put up for auction, rather quickly I might add, and I believe sold at that time.

How could they sell the home at auction if there was an outstanding fine on it???

Customer: replied 5 years ago.
What happens after I send the dispute of debt letter to the collection agency and the HOA still is asking for the money? Do I go to small claims?? Or do I just ignore them??
Expert:  Phillips Esq. replied 5 years ago.

Just to make sure..... the fines that were assessed to me was during the year I was trying to short sale my home, so it had not been foreclosed yet. The home after foreclosure was put up for auction, rather quickly I might add, and I believe sold at that time.

How could they sell the home at auction if there was an outstanding fine on it???

 

Response 1: The HOA lien is a junior lien. The person who purchased the property at auction should be responsible for the payment of the fines.

 

What happens after I send the dispute of debt letter to the collection agency and the HOA still is asking for the money? Do I go to small claims?? Or do I just ignore them??

 

Response 2: Just ignore them.

 

Customer: replied 5 years ago.
Last thing........after I send the dispute letter to the collection agency, what do I do if they provide all of the documentation it asks for and then continue to call me??
Expert:  Phillips Esq. replied 5 years ago.

Last thing........after I send the dispute letter to the collection agency, what do I do if they provide all of the documentation it asks for and then continue to call me??

Response: You would send them a cease and desist letter asking them to stop immediately from contacting you regarding the debt, that you have disputed the debt and that you are not responsible for the debt.

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