Do I Still Need to Pay My Condominium Fees After They Have Been Surrendered
Although your Condo Association fees can be discharged in bankruptcy, particular
types of Condo Association fees cannot be eliminated through bankruptcy.
You can have your past-due Condo Association dues discharged in bankruptcy,
but you have to still pay for current dues and fees that have been accumulated
since you filed for bankruptcy. In this blog, we explain why certain condo
fees can’t be
discharged if you file for
The ability to discharge condo fees through bankruptcy can be very confusing
to consumers and even attorneys unfamiliar with this issue. Generally,
any fees owed prior to filing the bankruptcy are dischargeable, while
post-filing fees may not. If you continue to legally own the property
after you file the bankruptcy, you also will continue to owe the condominium
fees. Even when you state your intent to surrender the property in the
bankruptcy, you still technically own it until the property has been foreclosed,
or until the title is transferred or sold to another person or entity.
The slow processing of mortgage-holding banks when it comes to foreclosing
on condominium properties contributes to the difficulty, as it may be
years before they finally decide to foreclosure; and you remain the owner
and liable for the condo fees.
However, if you want to keep your condominium, you may be able to discharge
past-due fees and keep the property, so long as a lien has not been filed
by the Condominium Association. If a lien has been filed, the debt is
discharged, but the Condominium Association may still foreclose upon the
property. Post-petition fees would need to be paid whether your intent
is to keep or surrender the property. Unfortunately, new Homeowners’
Association and Condo Association dues continue to accumulate after your
bankruptcy filing. This means you may still be liable for post-petition
fees due for your condominium after you file a
Chapter 7 bankruptcy.
The dues and fees that you owe before filing for bankruptcy will be treated
like any other type of unsecured debt. This is because there is no exception
to discharge for pre-petition condo dues in the Bankruptcy Code. As long
as your bankruptcy is filed before the Condo Association or Homeowners’
Association records a lien on your property, your past due fees will be
wiped out without a threat of foreclosure due to the past due fees.
If a lien is filed against your property, it will be treated like any other
type of lien in bankruptcy. In a
Chapter 13 bankruptcy, you may be able to file a motion to avoid a lien of the Condo Association,
in order to have your past due condominium fees become dischargeable general
unsecured debts. This may depend on the value of your property and the
indebtedness to the first mortgagee. But remember, this can’t be
done in a Chapter 7 bankruptcy. If your home has a lien when you go to
file your chapter 7 petition, you will eventually have to pay off past
due amounts secured by the lien, otherwise your property is subject to
Do you have more questions about discharging your debts through bankruptcy?
We can help. At Richard A. Heller, P.A. we have more than 75 years of
combined legal experience. Our team of skilled lawyers are familiar with
all types of bankruptcy cases and we can help you determine a legal strategy
that is right for you. Contact our Orlando team of bankruptcy attorneys
to schedule a free case evaluation today.