Tag Archives: bankruptcy

Associations Can Collect Delinquent Assessments Accruing After a Homeowner Files Bankruptcy

After a debtor files a bankruptcy case, the court enters a discharge order, which forever discharges and makes unenforceable many debts owed by the debtor.  However, the bankruptcy code exempts certain debts from this discharge. Among these are debts “for a fee or assessment that becomes due and payable after the order for relief to a…

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Bankruptcy Court Rules that “Absent” Owner in Chapter 7 Must Pay, So Long as They Remain Owner

In a recent decision, our firm successfully defended an Association’s ability to collect post-petition assessments in a Chapter 7 bankruptcy case. The decision reaffirmed the 2005 amendments to the Bankruptcy Code. Following these Amendments, a debtor remains liable for post-petition assessments, so long as he or she holds “mere” legal title ownership.   

In In re Brown, Bankruptcy Judge Donald Steckroth held that a debtor remained liable for post-petition association assessments in a Chapter 7 proceeding. This liability remained, even after the unit was abandoned by the Trustee and the debtor did not live at the unit, so long as the debtor held legal title.  

The matter was brought before the Court on the debtor’s motion to compel the Association to release monies levied in a bank account, post-petition, after the bankruptcy case was closed. As background, the Association had received a state court judgment for only

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Bankruptcy FAQs

By: Kristen N. Dillie, Esq.

Q: What do I do if I receive a Notice of Bankruptcy Filing?

A: You should inform your collections attorney immediately if you receive notification that a homeowner has filed bankruptcy.  If we have an active collections file against the homeowner, we are required to suspend further collections efforts against the homeowner while the bankruptcy is pending.

If we do not have an active collections file against the homeowner, we recommend you forward the notice to your collections attorney anyway.  We are able to access the Bankruptcy Court’s records and can file any paperwork necessary to be sure that the association is protected throughout the bankruptcy proceedings.  We can also monitor the proceedings and update you as to any significant developments in the proceedings.

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