Condominium and Homeowners Association Fees in Bankruptcy

Many of my clients who own a condominium, or live in a neighborhood that is subject to a homeowners association, are surprised to learn that after they file bankruptcy they still have an obligation to pay fees to the condominium or homeowners association. Filing bankruptcy will discharge the condominium or homeowners association fees or dues that had accrued before the case was filed, but will not discharge the obligation that becomes due after they file. This is due to an exception in the Bankruptcy Code Section 523(a)(16) which provides that a discharge will not include fees or assessments that become due and payable after the case is filed. The debtor will continue to be liable for these fees after the filing of the bankruptcy case until the debtor no longer has any legal interest in the property.

Laura J. Margulies is a principal in the firm of Laura Margulies & Associates, LLC. Our web site is located at: www.law-margulies.com. We represent consumers in bankruptcy and litigation matters in Maryland and the District of Columbia.