2003-06-11

BANKRUPTCY BASICS FOR COMMUNITY ASSOCIATIONS

The purpose of this article is to provide you with a basic understanding of the bankruptcy process and what can be done to protect the community association’s rights once a bankruptcy is filed by one of the community association’s homeowners.  Some creditors simply throw up their hands and write off the debt believing that the bankruptcy has removed all hope of collection.  Other creditors simply ignore the bankruptcy filing and continue their attempts to collect the debt.  Either course of...
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2003-06-11

Did you know that Owner Bankruptcy Filings Do Not Discharge Association Assessments or Pre-Petition Liens?

Many associations mistakenly believe that unit assessments are fully discharged when an owner files for bankruptcy protection.  Pursuant to Section 523 (a) (16) of the U.S. Bankruptcy Code (cited as 11 U.S.C. 523 (a) (16)), association assessments are not discharged in bankruptcy.  The foregoing section states that the bankruptcy discharge “does not discharge an individual debtor from any debt for a fee or assessment that becomes due and payable after the order for relief to a membership association...
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