BEWARE LIABILITY FOR HOMEOWNERS ASSESSMENTS AFTER BANKRUPTCY

Upon being discharged in a Chapter 7 bankruptcy proceeding, a debtor is relieved from his or her personal obligation to repay homeowners or condominium assessments that arose prior to filing the Chapter 7 bankruptcy petition. However, a provision in the Bankruptcy Code provides that the debtor is responsible for assessments that accrue after the filing of the petition if the debtor retains title OR possession of the unit being assessed. This can create a problem for debtors whose homes are being foreclosed, as they have no control over the timing of a foreclosure. If the foreclosure action drags on, the homeowner will be liable for post petition assessments. Call Wendy Anderson if you are facing this dilemma. She has been able to satisfactorily assist clients facing the assessment dilemma.