During these difficult economic times, many people have decided to walk away from their homes in hopes of improving their budgets and trying to find a fresh start. Even if your mortgage debt cannot be collected against you personally under Arizona’s anti-deficiency statutes, leaving your home does not necessarily eliminate all of your financial obligations until such time as the home is no longer in your name.
While some municipalities will require that they continue providing basic services, even if you decide to move out, thus leaving you liable for such utility costs, the main problem that I have seen is with homeowners’ associations. Even if you file a bankruptcy, fees and dues that arise after the filing of the bankruptcy are your responsibility until such time as you are no longer listed as the owner of the home. Because of the long delay by banks in foreclosing on homes, many people find that they can end up owing hundreds, if not thousands, of dollars in past due fines, assessments, penalties, and court costs, including attorney’s fees. In addition, fines may also be assessed by municipalities if the condition of your home and its landscaping deteriorates in violation of city ordinances.
Given the fact that a homeowner remains liable for his/her home until such time as he/she are no longer the legal owner, I advise my clients to continue to make his/her assessments and keep the property as neat as possible in order to avoid the imposition of fines, either from the association or pursuant to city ordinances.
There may be other options available for you. Speak with an experienced Chapter 7 or Chapter 13 attorney to find out what you can do to minimize your exposure. My office offers free in-person or over the phone consultations to help you decide what is best for you. You have nothing to lose but your debt.