Frequently Asked Questions - FAQ

Does PAC require a deposit from the homeowner association?

Absolutely Not.


Does PAC service all of California?

Yes. PAC provides HOA collection services in all 58 counties of California. Our company was established in 1987.


How does PAC get paid?

The delinquent homeowner pays us directly in more than 95% of the collections  assigned  to us. Only in rare circumstances does the HOA pay us, and when that happens, it is usually at an early stage in the collection process when the fee is minimal.


Our assessment collection company makes it nearly impossible for a delinquent homeowner to enter into a reasonable payment plan with our HOA. Sometimes we think it is because they want to charge more collection fees. What is your philosophy when it comes to offering payment plans?

When the amount owed is substantial and there is a reasonable expectation that the debtor can pay the monthly payments, we encourage payment plans. We always expect the debtor to pay all accrued collection fees, interest, late charges, and any other amounts owing. There is also a small servicing fee that needs to be paid by the debtor for administering the plan.


Does PAC encourage or discourage payment plans?

We encourage payment plans when the amount to be collected is substantial. Payment plans minimize the cost of collection and increase the likelihood that the HOA will be paid every dollar owed. Our goal is to avoid a foreclosure if possible.


Does PAC provide monthly status reports to HOA clients?

Yes. In addition, you may call us for updates at any time.


What exactly is an assessment lien?

An assessment lien is a legal claim against the property of another. It must be paid before the property can be sold or referenced unless the lien or liens are assumed by the buyer. Liens are almost never assumed and they are never accepted by lenders. See: Real Property Liens in California.


Does PAC foreclose non-judicially or judicially?

We use the non-judicial foreclosure method when appropriate and necessary and act as the foreclosure trustee. If we believe a judicial foreclosure is warranted, one of our collection attorneys will contact your board and will provide a no-cost consultation explaining all other options available to the HOA.


Does PAC monitor what action the debtor's real estate lender has taken?

Yes to the extent possible. We monitor what documents have been recorded by senior lenders. This would include any Notices of Default (NOD) and Notices of Trustee Sale (NOTS). Sometimes a lender will record a NOD or NOTS and move aggressively to foreclose. Other times, a lender will record a NOD or NOTS and do nothing more.


If our community association is forced to foreclose on a property, can PAC help us with our legal obligations concerning the property?

Absolutely. In fact, upon the association's request, we can probably arrange to have a buyer lined up to acquire the property before the foreclosure is complete. We can also arrange any other services that may be required, upon your request.


Can a mortgage lender require that our HOA make payments to them if the owner is not paying?

No. A senior lender may foreclose on the property if they are not getting paid, but they can never pursue the HOA for any money they are owed.


If our HOA forecloses on a property, can we retain it long term and rent it out for income?

Yes. Your association may keep it as an investment or can sell it.


How would you describe PAC's collection philosophy?

PAC is aggressive in that we do not waste time and we are able to utilize every legal remedy available. PAC also treats every debtor respectfully and we always comply with all federal and state laws.


What are some of the ways PAC collects court Judgments?

See Eleven Ways to Collect a Court Judgment.


What is a Foreclosure Warning Letter?

Foreclosure Warning Letters are not required by law. They are sent to debtors as a matter of policy immediately after a board has signed a Foreclosure Resolution and Minutes. The Foreclosure Warning Letter gives the debtor 7 calendar days to respond. If a response is not received within the 7 calendar days, we then process a Notice of Default (Non-Judicial Foreclosure). Less than 1% of all collections handled by our firm go to foreclosure or into bankruptcy. The other 99% pay their debt.


What exactly is a money judgment and how can a judgment be used to collect money that is owed?

A money judgment is an order from a court that a person or business entity pay the creditor holding the judgment a specific amount of money which the court awarded to the plaintiff as damages. Money judgments accrue interest until the amount owing is paid. See: Money Judgments.


What is a Writ of Execution and how is it used?

A writ of execution is a court order that directs law enforcement personnel to commence the taking of property from the debtor to enforce the collection of a court ordered judgment. Assets taken may include bank accounts, stock, vehicles, wages, or any other non-exempt assets.


How does a Wage Garnishment work?

A wage garnishment is a legal process in which law enforcement may take up to 25% of a judgment debtor's wages to pay a judgment creditor money that is owned pursuant to a court ordered money judgment.


What is the Writ of Execution and how is it used?

A writ of execution is a court order that directs law enforcement personnel to commence the taking of property from a debtor to enforce the collection of a court ordered judgment. Assets taken may include bank accounts, stock, vehicles, wages, or any other non-exempt assets.


Our HOA is master metered for water service. Is it possible to turn off a member's water if they are not paying their monthly HOA assessments?

No. The California Supreme Court has ruled that an association may not terminate a member's utility services which includes water, gas, and electricity.


What is a Debtor's Examination?

A debtor's exam is a court proceeding in which a debtor is forced to appear in court to answer questions under oath asked by the creditor, an assignee of the debt, or his or her attorney. The debtor is required to answer questions about his or her income, employment, clients, customers, spouse, assets, and provide other information that would assist the creditor in collecting the judgment. If the debtor does not appear in court, the court may issue a bench warrant for the arrest of the debtor. Debtors must bring subpoenaed documents such as paycheck stubs, bank statements, property title documents, including deeds, and other information that would assist the creditor in collecting the debt.

Debtor's exams are highly effective when combined with a subpoena. Our firm uses debtor's exams whenever appropriate to expedite the collection of a debt.


Our HOA has several uncollected judgments from Small Claims Courts and one from the Superior Court. Can PAC help us collect the amounts owing?

PAC can accept an assignment of the judgments and will then take every legal step available to collect the amounts owing. This service is generally offered on a percentage arrangement.


What happens if a delinquent homeowner files for bankruptcy?

While bankruptcy filings are not common, bankruptcy laws exist to protect debtors by stopping all collection action. PAC can monitor the status of the bankruptcy proceedings, or under some circumstances, an attorney can seek relief from the bankruptcy court by requesting an order permitting the HOA to proceed with a foreclosure. This is referred to as seeking relief from the automatic stay of the bankruptcy. During a bankruptcy proceeding, no collection action may be taken while the automatic stay is in force. That includes anything spoken or written that has the intention or is an attempt to collect the debt. PAC has extensive experience in dealing with bankruptcies.


When a delinquent homeowner files for bankruptcy, does it make a difference whether a lien has been recorded against the property?

It may make a big difference. In bankruptcy, a creditor, such as a homeowner association, is a secured creditor if a lien has been recorded while an HOA without a recorded lien is an unsecured creditor. Secured creditors are always paid before unsecured creditors. While recording a lien never guarantees payment, it often makes the difference between getting paid and not getting paid.


What happens when a delinquent homeowner files for bankruptcy and does not move out?

The filing of a bankruptcy petition does not guarantee the property owner that the HOA or mortgage lender will never be able to foreclose. In most cases, a bankruptcy only buys the debtor a few months before a foreclosure takes place. In addition, all assessments incurred after the bankruptcy filing date can be collected by the HOA without regard to the bankruptcy as long as the debtor is either living in the property or renting it.


Why don't more delinquent homeowners file for bankruptcy in order to avoid paying assessments?

There are several reasons. First, if a homeowner association has a lien on the property, sometimes a bankruptcy will not prevent the HOA from collecting. This is a complex area of the law which cannot be adequately addressed on this site. In addition, many people do not file for bankruptcy because a payment plan is a better alternative. It avoids a bankruptcy filing on their credit history that can continue for 7 or 10 years depending on the type of bankruptcy. Lastly, some people do not qualify for filing a bankruptcy petition for various reasons. Most delinquent owners understand that filing for bankruptcy or permitting a foreclosure to take place will affect their ability to borrow money for a car or home for many years. It will even affect their ability to lease a residence.


Can PAC help our community association establish a collection policy?

Yes. We can assist your HOA in establishing a customized written collection policy that complies with the law, is consistent with your association's CC&Rs, and that makes the collection process easier and faster. A sample collection policy has been provided on this site. We recommend that an attorney review and approve any proposed collection policy before your association adopts one.


How does the non-judicial foreclosure process work?

The process is complex, however, we have created a Timeline of the Non-Judicial Foreclosure Process which provides the major steps.


Does a non-judicial foreclosure require the filing of a lawsuit?

No. No court action is required to be filed by the homeowners association seeking to foreclose non-judicially.


What is a foreclosure trustee?

A foreclosure trustee is the party that handles non-judicial foreclosures for lenders and homeowner associations. They are selected by the lender or homeowner association, but must treat all parties fairly, in accordance with the law, including the debtor.


Can a partial payment of assessments stop a foreclosure?

Homeowner associations are required to accept partial payments from owners who are in the lien or foreclosure stages of collection and, if the amount of the payment reduces the delinquent assessments to less than $1,800, the association cannot foreclose, judicially or non-judicially, unless, after receipt of the partial payment, there remain delinquent assessments that are more than 12 months past due.

It is important to note that assessment liens are not required to be released after receipt of a partial payment. Also, associations are not required to accept payment plans.

Payments made by the owner must be applied to assessments first. However, the order of application of payments can be waived by the owner in a payment plan.


Does the board have a legal duty to take collection action against delinquent homeowners?

The board has a duty to do what is in the best interest of the HOA and to treat all homeowners equally. When a homeowner is not paying their assessments, for any reason, the board must take every reasonable step to collect the money. This almost always means hiring a qualified assessment collection firm like PAC.


How does our community association start the process?

You may utilize the Collection Agreement on our website, or you may call us to get started. No money is required.


Do you have experience in collecting delinquent assessments where the owner of the unit is deceased and the property is in probate or will soon be in probate?

Yes. We have collected delinquent HOA assessments under these circumstances many times over a period of more than 33 years.


What is a fraudulent transfer and how can it effect a debtor?

Fraudulent transfers can result in a debtor being fined and possibly ending up in prison: Fraudulent Transfers


Judgment Collections

PAC can collect your homeowner association's unpaid Small Claims Court and Superior Court judgments when you utilize our collection services. We collect judgments against homeowners living within your community, former owners, contractors, and vendors. Call for additional information or you may complete the Judgment Collection Data Form.



Litigation Glossary


Pacific Association Collections