Sundown, NY Bankruptcy Law Firms & Lawyers

My first question would be whether the house has $91,000 in equity or that is simply the value and you have a mortgage on it? That would make a huge difference in your case. In bankruptcy you have to "exempt" or "protect" your assets. The job of a Bankruptcy Trustee is to try to liquidate unprotected assets to pay off your creditors. Plus they take commission on what they collect. In bankruptcy you can either use 704 exemptions which allows you to protect the equity in your residence and limits what other things can be protected (in your case the stocks/investment accounts will most likely not be protected)... OR you can use 703 exemptions which provides you with a $23,000 Wildcard you can use to protect your stocks/investment accounts/etc. but you cannot protect $91,000 in equity. So it's a give and take. I would highly recommend sitting down with an attorney to go over the facts of your case to let you know if you should file or not. If equity in your home is not a problem I would definitely recommend you filing bankruptcy to stop the lawsuit and get rid of the $35,000 unsecured debt.

Your HOA cannot seek to recover on a debt that was properly scheduled on your petition, however, if it had a lien on your property before you filed, that lien will remain post-discharge. If you then try to sell or refinance the property, the lien will have to be satisfied. Talk to your bankruptcy lawyer and determine if there are grounds to strip the lien to avoid this outcome. Good luck.

I suppose you could sign a reaffirmation but why bother? There is no law against your paying a discharged debt after bankruptcy. The law only forbids their collection efforts to compel payment. It would not be wise to give them stock as collateral before filing bankruptcy as a Trustee would likely simply sue them to retake the collateral as a voidable preference.