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Condo Associations & Bankruptcy

Are Condo Association Fees Dischargable In Bankruptcy?

Condo associations are a fact of life in New Jersey.  As more and more developments pop up all over the state more and more people are living in a development with an association….

And an association fee….

These association fees are high and can be particularly troublesome for struggling condo owners who can barely pay their mortgage.  Condo owners walking away from their condos need to be extra cautious about choosing to pay or not pay condo fees and should discuss this decision with an experience bankruptcy and foreclosure attorney.  Unpaid condo fees can quickly become liens on the property, garnishments, and bank account levies if they go unpaid too long.  Some condo associations have even reserved the right to have your car towed if you don’t pay those fees!

Bankruptcy can offer some safe harbor however depending on your circumstances it may  not be as much as you may like.   The rules on condo fees are complex and vary based on the specifics of each case.

Generally speaking, unpaid condo association fees that have not been turned into a judgment at the time of your bankruptcy filing can be discharged HOWEVER ongoing condo association fees are not.  Once your case is filed you MUST pay those fees going forward  as there is little to no protection from the bankruptcy court going forward.  The protection is backward looking, not forward looking.

There are variations and exceptions to the rules for condo associations so it is CRITICAL you tell your bankruptcy attorney if you have a condo association fee problem.  Where there is a judgment or a lien on the property the rules change.  The rules change again if you have a “homeowner’s association” versus a “condo association”.  You see how quickly this can grow complicated.  Telling us right away that you have unpaid condo fees allows us to formulate just the right strategy from day one for dealing with your unpaid condo association fees inside your Chapter 13 bankruptcy plan, your Chapter 7 bankruptcy case, and beyond your discharge.

Interested in how we can help you with troublesome condo fees?  Give us a call at 732-302-9600 or fill out our online consultation form and we will call you!