Management Board Deals with Condo Owner’s Personal Bankruptcy
Posted by | Posted in Credit Report | Posted on 06-08-2010
If an individual condominium owner is delinquent or files for bankruptcy protection, there are certain ways that the management company or board can deal with the financial issues that are both fiduciarily sound and legal.
In his column, Condo Adviser, in the Chicago Tribune, writer Mark Pearlstein points out that, although a condo building’s board of directors must diligently pursue tenants’ delinquent accounts, there are rules to which they must adhere when it comes to communicating with these owners. These regulations are governed by the federal Fair Debt Collection Practices Act, as well as any individual state procedures.
According to Pearlstein, “The proper format of a delinquency assessment notice is to state the amount of the claim, including legal fees, by attaching an account ledger with an itemization of all charges.”
However, upon receiving notice that a condo owner has filed bankruptcy, collection activity must cease, as a bankruptcy filing imposes an automatic stay on all collection activity. Any further legal actions taken by the condo association must be cleared by the courts.
If a unit owner files for Chapter 7 personal bankruptcy, it exhibits that the owner has no assets and will probably sell the condo; the association will not be able to collect assessments due before the bankruptcy filing. If, however, the unit owner files a Chapter 13 personal bankruptcy, he is committed to a debt repayment plan. In this case, the debtor must pay any assessments due after the filing, known as post-petition assessments. If the delinquent owner does not obtain an approved bankruptcy plan, does not make required payments or does not pay post-petition assessments, the condominium board may then seek permission from the courts to pursue its action in state court and take possession of the property in question.
If you find yourself facing the loss of your condo due to missed payments, filing Chapter 7 or Chapter 13 personal bankruptcy could help you make a fresh start. For experienced and knowledgeable bankruptcy assistance, trust the attorneys from www.legalhelpers.com. Call toll-free 800-260-1402 today for your initial free consultation or come into one of their 100 sites across the country.
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