How to Stop HOA Foreclosure in Maryland: 4 Key Strategies

How to stop HOA foreclosure in Maryland

You’ve fallen behind on your HOA fees, and now letters and notices, including Notices of Lien, are flooding your mailbox. You’ve been served with a lawsuit and a bunch of court documents filled with legal jargon, so you ignore them until the sheriff arrives and posts a notice on your property that your house is going to be auctioned off at a “Sheriff’s Sale.”

You desperately want to save the home you’ve worked so hard for and you’re wondering how to stop HOA foreclosure in Maryland.

You have options.In this article, we’ll provide you with 4 strategies you can use to save your home from HOA foreclosure.

Understanding HOA Foreclosure

HOA foreclosure is a legal process that allows your homeowners’ association to sell your property to collect unpaid dues or assessments. This can be quite different from a mortgage foreclosure, which your lender initiates when you default on your home loan.

Common reasons for HOA foreclosure include falling behind on your HOA fees, fines, or special assessments. You might not even realize you’re in danger of losing your home until the foreclosure process is underway.

Don’t let HOA foreclosure catch you off guard. Learn how to stop HOA foreclosure in Maryland with these strategies:

1. Pay Off the Debt

If you want to understand how to stop HOA foreclosure in Maryland, the most straightforward solution is to pay off the outstanding debt. By bringing your account current, you can stop the foreclosure process and protect your home. This is also called “reinstatement.”

However, coming up with the money can be challenging and, if you’re reading this article, we know you’re already experiencing financial distress. You may want to consider taking out a personal loan or borrowing from family and friends. But it’s crucial to acknowledge that time is not on your side.

If you’re unable to pay off the debt in full, it’s vital to explore alternative solutions as soon as possible. The longer you wait, the fewer options you may have to protect your home.

2. Negotiate a Payment Plan

If paying off the entire debt at once isn’t feasible, negotiating a payment plan with your HOA is your next best bet. Many HOAs are willing to work with homeowners who are proactive and communicate their financial difficulties.

To propose a payment plan:

  1. Contact your HOA board, management company, or the law firm representing them and request a meeting to discuss your situation.
  2. Be honest about your financial difficulties and express your commitment to resolving the debt.
  3. Offer a realistic payment schedule that fits your budget, considering your income and essential expenses.
  4. Be prepared to provide evidence of your financial hardship, such as pay stubs or bank statements, if required by the HOA.
  5. Once you’ve reached an agreement, ensure that the terms are put in writing and signed by both parties to formalize the arrangement.

If you are unable to reach an agreement with your HOA on a payment plan, the foreclosure process will likely move forward.

3. Dispute the Debt

You may not always have the option to dispute the debt. However, you can dispute your HOA debt if:

  • You believe you’ve been incorrectly billed;
  • You’ve been charged for unapproved expenses;
  • The HOA has failed to follow proper procedures; or
  • The HOA has made clerical errors, misapplied payments, or charges for services or repairs that were not actually performed.

If you believe you have a valid reason to dispute the debt, start by gathering evidence to support your claim, such as:

  • Payment records;
  • Correspondence with the HOA; and
  • Any documentation that shows errors or procedural failures by the HOA.

Submit a written dispute to your HOA, clearly explaining your position and requesting a review of your account. Be prepared to follow up and provide additional information as needed.

If the HOA fails to respond or resolve the issue satisfactorily, talk to a lawyer to protect your rights and explore further options for how to stop HOA foreclosure in Maryland.

4. File for Bankruptcy

Filing for bankruptcy will stop HOA foreclosure cold. When you file for Chapter 13 or Chapter 11 bankruptcy, an ‘automatic stay’ gets triggered, which immediately stops the foreclosure process. The automatic stay prevents the HOA from continuing with the foreclosure, giving you valuable time to reorganize your finances and develop a plan to address your debts.

Filing for Chapter 13 bankruptcy lets you propose a repayment plan to pay off your HOA arrears, including HOA statutory and judgment liens, over a 3 to 5-year period.

Chapter 11 gives you the freedom to create a more custom-tailored, longer-term repayment plan. Choosing the best path for your situation puts you in control and sets you on the road to financial stability.

Before deciding to file for bankruptcy, consult with an experienced bankruptcy attorney who can assess your unique situation and provide guidance on your best course of action.

Bankruptcy: Your Guaranteed Method for How to Stop HOA Foreclosure in Maryland

Filing for bankruptcy may sound scary. However, it can be a smart strategy to reorganize your assets, repay your HOA, and save your home. It may be one of the best decisions of your life.

Filing for bankruptcy slams the brakes on the HOA foreclosure process, via the automatic stay that goes into effect when you file for Chapter 13 or Chapter 11. If the HOA continues with the foreclosure process and you want to keep your home, bankruptcy may be your best option.

With the guidance of an experienced foreclosure defense attorney like Steiner Law Group, you can confidently navigate the process and take control of your financial future.

When to Speak to a Bankruptcy Attorney

The moment you receive a notice of default or foreclosure from your HOA, consult with a bankruptcy and foreclosure attorney. 

Delaying action can limit your options and put your home at greater risk. A qualified foreclosure lawyer will assess your unique situation, explain your rights and options, and guide you through the complexities of the foreclosure process.

Don’t wait until it’s too late. The earlier you involve a lawyer, the more opportunities you’ll have to stop an HOA foreclosure—and the more prepared and confident you’ll be going into the bankruptcy process.

Key Takeaways

  • HOA foreclosures can be initiated for unpaid dues, fees, or assessments.
  • HOAs can use a sheriff’s sale to get around many regulations required for regular foreclosures.
  • Paying off the debt in full is the quickest way to stop an HOA foreclosure.
  • Negotiating a payment plan with the HOA can provide a viable solution for those experiencing financial hardship.
  • Disputing the debt is an option if you believe you’ve been incorrectly charged or the HOA failed to follow proper procedures.
  • Filing for Chapter 13 or Chapter 11 bankruptcy will stop the foreclosure process, let you catch up on missed payments, and give you more control over your HOA.
  • Speak to a bankruptcy attorney to explore your options, protect your rights, and develop a personalized plan to stop the HOA from foreclosing on your home.

Contact Steiner Law Group to Save Your Home Today

Don’t let HOA foreclosure threaten your home and financial security. The experienced attorneys at Steiner Law Group are ready to fight for you. Schedule a consultation today to save your home or call us at (410) 670-7060.

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About Eric Steiner, Esquire

Mr. Steiner graduated from the University of Michigan Law School in 2006. Since then, he has focused his practice on bankruptcy, real estate, commercial and consumer collections, including representing the third largest lender in the greater Baltimore area.