As part of the changes to the Bankruptcy Laws introduced in 2005, Condominium Fees that are billed after your Chapter 7 filing are not discharged even though you may no longer have a legal obligation to pay on the Mortgage. The same rules apply to shares in cooperatives or homeowners associations. However, if you are behind in your fees prior to filing, those fees are discharged. The problem arises in those situations where the Debtor is walking away from the Condo, or Home or is facing a foreclosure. On occasion, the bank or mortgage company will not foreclose, or delay foreclosure. The result being that the debtor continues to owe the fees because liability for fees is based upon “legal, equitable or possessory ownership” of the property. So until the debtors name is off the title, you will continue to owe the fees. One way to deal with this issue, is to wait until Foreclosure before filing for Bankruptcy, the other is to simply stay in the Condo or Home until Foreclosure so you are at least getting some benefit for the fees.
nothing in this post should be interpreted as legal advice. There is no attorney client relationship until you and I have a written contract.
