The simple answer is yes, the condo associations can be put in a Chapter 13 bankruptcy and be repaid over a 3 to 5 year period. Much like a mortgage that you fell behind on, the condo association is a secured debt, secured by your property that you need to pay in order to keep that property or in order to keep the right to possess that property. By filing a Chapter 13, you can take the amount that you owe to your condo association and propose to repay that amount over a 3 to 5 year period. Now, the catch is that you must continue to make your regular condo Association payment going forward after your case is filed. Simply reorganizing the part you fell behind and failing to make the current payment is going to lead you back into subject to eviction.
Condo associations are different than mortgage debt in that condo association fees give you the right to possess your own property within the condo. Thus, if you fail to make your condo association fees, you can actually be evicted which is a short 3 to 5 week period of time. I have had cases before were someone was actually evicted from their own home that they were reorganizing through a Chapter 13. Once the client got current with the association, the client was able to move back into the property and continue with the reorganization that they were doing when they were outside of the property.
So it’s very important if you are going to choose between paying your mortgage or your association, you need to pay your association first. Your association has the ability to evict you which is a 3 to 5 week period. And your mortgage company can foreclose upon you which take 7 to 11 months. Contact your bankruptcy attorney with any questions regarding condo association fees.
