Can Bankruptcy Help With Past-Due Homeowners Association Fees?

 Posted on August 08, 2025 in Bankruptcy

If you live in a community with a homeowners association (HOA), falling behind on your dues can quickly lead to serious consequences. Late fees accumulate, liens can be filed against your property, and in some cases, you could even face foreclosure. For many homeowners in Texas, HOA arrears are part of a larger financial struggle. Bankruptcy may offer relief, but the rules are not always clear-cut.

Attorney Chance McGhee is a Schertz, TX personal bankruptcy lawyer who has been helping clients for over 20 years. As the current director of the San Antonio Bankruptcy Bar Association and one of the three best-rated bankruptcy attorneys in the city, he brings both legal skill and local insight to every case. If you are behind on HOA dues and considering bankruptcy, our firm offers free consultations to help you understand your options.

Filing for Bankruptcy When You Owe HOA Fees

Many people are surprised to learn that HOAs have real legal power, including the ability to place a lien on your property and foreclose, even if your mortgage is current. This is common in Texas, where HOA covenants are enforceable under both state and federal law.

Whether or not bankruptcy can help with these debts depends on several factors, including whether you file Chapter 7 or Chapter 13, whether the dues were assessed before or after you file, and whether your HOA has already filed a lien or begun foreclosure proceedings.

Chapter 7 Bankruptcy and HOA Debt

Chapter 7 bankruptcy is designed to discharge unsecured debts like credit card balances and medical bills while offering a fresh start. But HOA dues can be more complicated. In Texas, past-due HOA assessments that were owed before you file Chapter 7 may be discharged, meaning you are no longer personally liable for them. However, there are major limitations:

• Ongoing dues that come due after your bankruptcy filing are not discharged, even if you surrender the property.

• If the HOA has already filed a lien, that lien may survive bankruptcy. That means the HOA could still foreclose on the home, even if your personal obligation is gone.

• Chapter 7 does not allow you to catch up on HOA payments if you want to keep your home; it only erases personal liability.

In other words, Chapter 7 can be helpful if you plan to walk away from the home. But if your goal is to stay, you may need a different approach.

Chapter 13 Bankruptcy May Be a Better Option for Homeowners Who Want to Keep Their Property

For homeowners in Texas who want to keep their house and resolve past-due HOA debt, Chapter 13 bankruptcy is often the better tool.

Chapter 13 allows you to propose a repayment plan, typically over three to five years, where you catch up on arrears while continuing to make current payments. This includes mortgage payments and HOA assessments.

Chapter 13 helps manage HOA arrears over time; you can spread out back dues in manageable monthly payments, avoiding foreclosure. It also stops legal action because filing the petition triggers an automatic stay, which halts HOA lawsuits, lien enforcement, or pending foreclosures. Finally, Texas offers generous homestead exemptions, and Chapter 13 can help preserve that equity while giving you breathing room.

What Happens if the HOA Has Already Filed a Lien or Started Foreclosure?

In Texas, HOAs can file liens and even foreclose non-judicially, meaning they do not need to sue you in court the way a mortgage lender typically does. If the HOA has already taken legal action, timing is critical. If you file before a foreclosure sale, bankruptcy can still stop the process through the automatic stay, as long as the sale has not been completed. However, if you file after the sale, bankruptcy generally cannot undo a completed HOA foreclosure, though it might still help with other debts or eviction delays.

If you have received a notice of lien or a foreclosure warning from your HOA, do not wait. Attorney McGhee can review your timeline and determine whether bankruptcy or another legal strategy can still protect your property.

Do I Still Owe HOA Fees After Surrendering the Property?

One of the most frustrating surprises for debtors in Chapter 7 cases is the lingering responsibility for HOA dues. If you file Chapter 7 and state that you intend to surrender your home, but the property does not sell right away, you may still owe HOA assessments that accrue after your filing date.

This is why it is so important to understand timing and post-bankruptcy obligations. Some people assume they can walk away entirely, but until the deed legally transfers, the HOA can still bill you. Attorney McGhee often counsels clients on how to minimize this liability, and in some cases, helps them negotiate with the HOA for a faster turnover or limited collection.

Bankruptcy Can Be a Tool for Financial Overhaul, Not Just a Fix for HOA Fees

If you are behind on HOA dues, you are not alone. Rising costs, post-pandemic inflation, and rigid association policies have left many Texas homeowners struggling. Falling behind on HOA dues is rarely the only issue. Many clients come in with credit card debt, medical bills, back taxes, and delinquent mortgages. When you look at the full financial picture, bankruptcy may offer relief far beyond just solving the HOA problem.

As one of the top three bankruptcy lawyers in San Antonio with high rankings on Google and Avvo, Attorney McGhee brings over two decades of experience to each case. He knows that every person’s situation is different. Some need immediate protection from foreclosure, while others need to prevent their wages from being garnished. Some simply want to get out of debt and breathe again.

Whatever your situation, you do not have to face this alone, and you may have more legal power than you think. We will explain your options in plain English, not legal jargon, and help you choose the best path forward.

Contact a San Antonio, TX HOA and Bankruptcy Attorney

Bankruptcy is not about failure. It is a legal, strategic tool to reset your finances and protect your future. Whether you are worried about HOA foreclosure, mounting debt, or simply need to understand your rights, we are here to help.

Attorney McGhee, Director of the San Antonio Bankruptcy Bar Association and one of San Antonio’s most respected bankruptcy lawyers, is ready to help. Call the Law Offices of Chance M. McGhee at 210-342-3400 today to schedule your free consultation with a Schertz, TX bankruptcy attorney who will fight for your future.