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Association fees bring new debt after bankruptcy

On Behalf of | Dec 14, 2011 | Chapter 13 Bankruptcy, Firm News

Filing for bankruptcy can lead many to have mixed feelings. On the one hand a successful bankruptcy takes a lot of debt off your shoulders, but on the other it represents a strike against your credit and there are exceptions to the types of debt that bankruptcy will exonerate. One debt that you still have to watch out for is association dues.

When someone files for Chapter 7 or Chapter 13 bankruptcy their creditors are given a cease and desist letter that prohibits them from collecting on any old debts. But one thing many owners of townhouses or condominiums forget is that their association fees are new debt because it is a monthly charge, unlike their actual mortgage payment. Even if they are not living in their condo or townhouse these fees still accrue even as the bankruptcy process continues or the filer’s home is up for sale or foreclosure.

But even though there may be some exceptions to which debts stop, such as association fees this shouldn’t keep you from filing for bankruptcy if that is what you need to do. What you will want to do is carefully weigh the pros and cons of filing with your family as well as your attorney in order to get a clear and realistic picture of what to expect during and after the bankruptcy.

Filing for bankruptcy can solve many debt problems, but it is also important to do what you need to in order to restructure you financial habits to help assure a strong future. A bankruptcy attorney can help lay out what will be expected of you post bankruptcy, so do not hesitate to ask him or her questions throughout and after the bankruptcy process.


Sun Sentinel (blog): “Can you walk away from your HOA/condo fees after filing for bankruptcy?” Jean Winters, Esq., Dec. 9, 2011

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