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Ask Law Educator, Esq. Your Own Question
Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 111683
Experience:  Licensed attorney practicing landlord-tenant, land use and other real estate law and litigation.
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Lien/Judgement filed against me by Home Owners Association

Customer Question

Lien/Judgement filed against me by Home Owners Association pre-petition Chapter 13. Bank foreclosed on home therefore making lien obsolete and HOA claimed 11K in "unsecured" debt under Chap. 13. Does the judgement still stand or is it obsolete because of the foreclosure? I know the debt still survives but does the judgement? Can the judgement be released because it's unsecured?
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
The judgment would be claimed as an unsecured debt in the bankruptcy and would be reduced in line with the other unsecured creditors or would be extinguished in the bankruptcy if there is nothing left to pay the unsecured creditors. If you have the debt in your bankruptcy, they will be treated just like any other unsecured creditor is treated in your bankruptcy case.
Customer: replied 1 year ago.
Thanks for your reply! So, essentially, the judgement is gone and it's now considered an unsecured debt?
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your reply.
Well the judgment is not extinguished until the final bankruptcy order extinguishes it, but yes it is part of your unsecured debt in the bankruptcy.
Customer: replied 1 year ago.
last question, if I wanted to (in a year) purchase a home, I'd have to pay the judgement off prior to closing - even if it's listed as an unsecured debt in Chapter 13? I can't pay anything off until my plan is completed..in two more years.
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your reply.
Unfortunately, filing Chapter 13 or Chapter 7 does have some consequences, so your credit would be impaired and you likely would not qualify for a home loan if you are in bankruptcy no matter whether this debt is listed as secured or unsecured. So you would not be able to pay the debt off, it would be part of your Ch 13 and you would not qualify for a home loan anyhow while in the bankruptcy.

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