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Filing Chapter 7 Bankruptcy, Surrendering Condo With HOA Fees

Question: I am surrendering my condo in my Chapter 7 bankruptcy filing. Although, I had stopped paying the mortgage I still pay the Association Fee. The condo has a new assessment and my share of the assessment is almost $3,000.00. I am currently on unemployment income and can barely meet my expenses. If I don’t pay this assessment can the condo come after me for the money? My two reasons for not wanting to pay this assessment is that I can’t afford it and I am surrendering the condo.   My second question is, if I stop paying the Association fee, can the condo come after me later to demand the money?   My third question is, since I am surrendering the condo in bankruptcy, how much time do I have before I would be required to move out?

Answer:

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Under the U.S. Bankruptcy Code homeowners or condominium association fees cannot be wiped out in bankruptcy if those fees arose after the date the bankruptcy was filed. A post-bankruptcy sale or foreclosure ends any further accumulation of association fees.

If you can't meet your expenses as is, and you're giving up the condo, then you may want to look into filing for Chapter 7 bankruptcy. Let the condo go, let the bank sell it and pay off the association fees and the assessment. The bank will need to do so in order to sell the condo to a new owner (if they don't then they won't be able to convey clean title to the new owner).

If there's a balance left over after that, the amount you owe will likely be far less than what you owe now.

As to the question of how much time you have until you need to move out, that depends on how far into the foreclosure process you are right now. Typically, New York foreclosures take at least 6 months to complete even without an intervening bankruptcy filing.

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