As sure as the sign on my door reads “ Zuckerberg Bankruptcy Law Offices”, out of the next ten people who visit me to discuss filing personal bankruptcy in Indiana, one or two of them will turn out to be condo owners.
Of course, every situation is different, and everyone who comes to see an Indiana lawyer for bankruptcy has his or her own set of circumstances. It’s just that our Indianapolis, Bloomington, Anderson, and Columbus bankruptcy lawyers have learned that, given how many condominiums there are in the Hoosier state, we need to be prepared for those special issues that arise whenever condo owners file Indiana individual bankruptcy.
Of course, as is true with any type of home, often clients ask us for help to stop foreclosure, or even help negotiating mortgage modifications. Often, as with individual residences, Chapter 13 bankruptcy law can be of help keeping owners in their homes.
When it comes to condo owners who are filing either individual bankruptcy or small business bankruptcy in Indiana, the special complications often relate to association fees. First of all, as a longtime debt consolidation lawyer offering bankruptcy services in Indiana, I’ve found that few people realize that their monthly condo fee is one obligation that can’t be forgiven through bankruptcy Chapter 7 in Indiana.
There are several other little-known “traps” when bankruptcy in Indiana is combined with foreclosure in Indiana, and when either or both have to do with a condo owner:
When bankruptcy is filed by a condo unit owner, the automatic stay goes into effect, which prohibits the association from enforcing the collection of the monthly fees from that owner.
If the bankruptcy is Chapter 7, the condo owner’s non-exempt assets will be sold to pay debts incurred before the bankruptcy, including any delinquent condo fees.
The monthly dues beginning from the date of the filing will continue to pile up, and the condo owners will continue to be liable for those fees for as long as they own the condo.
- In a way, everybody loses. The ones who filed personal bankruptcy in Indiana are piling up more debt even as the bankruptcy process is going on. The condo association (all the other homeowners in the complex) are taking a big hit to their cash flow because of the missed payments.
In situations complicated by condo ownership, it’s easy to see why having an experienced Indiana bankruptcy attorney handle the details is so important. In condominium communities, the idea is supposed to be sharing costs and lessening responsibilities for home owners. But when Indiana bankruptcy comes into the picture, things can get complicated for condo owners and for their condo associations as well!
Categorised in: Bankruptcy Indiana
This post was written by Mark Zuckerberg