Condominium Assessments & Bankruptcy: WHAT CAN ASSOCIATIONS COLLECT?
that (post-petition) assessments that be- come due after a debtor has filed for Chapter 13 bankruptcy are also discharge- able under 11 USC Section 1328 (a)? In the Goudelock case, the debtor surrendered the property in her Chapter 13 Plan, and the lender subsequently foreclosed on the property, and the association sought to determine that the delinquent post-petition assessments from the date the debtor filed for bankruptcy until the date the lender foreclosed on the property were not dischargeable. While the bankruptcy court ruled in favor of the association, the Court of Appeal reversed the bankruptcy court holding that post-petition assessments arise from the pre-petition debt and therefore the debtor’s personal obligation to pay
D 24
id you know that a new case in the 9th
Circuit, Goude-
lock v. Sixty-01 Association of Apartment Owners, holds
said debt (both the pre-petition and post-petition assessments) is eliminated when the debtor is granted discharge in his/her/its bankruptcy case.
Tus, the debtor’s personal obligation to pay is eliminated and an association is unable to collect the delinquent post- petition assessments from a debtor who has surrendered the real property in his/her/its bankruptcy case and whose Chapter 13 Plan has been confirmed and who has been granted discharge, except that the Association retains its in rem rights against the property. In order words, while 11 USC Section 523 (a)(16) provides that post-petition assessments are not dischargeable as long the debtor continues to maintain legal, possessory or equitable interest in the property (i.e. continues to own, reside in and/or rent out the property),
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