Condominium fees and special assessments can really mount up if you are in financial difficulty and can't pay them. The association can come after you with a lawsuit and even file a lien against your home! Bankruptcy can wipe out those fees owed at the time you file it (but not a lien if it was already filed), but what about the fees and assessments going forward. Do you still have to pay them?
Fees on Condo Owed As Long As You Own It
In most cases yes, unfortunately, as long as the home is titled in your name. Many people in New Jersey are upside down on their homes. They can't afford the mortgage, and they cannot sell it because they owe more than it is worth.
In those instances where they are also underneath a mound of debt that they can never repay, I often recommend that they stay in the home and file bankruptcy. The bankruptcy discharges (wipes out) any responsibility to pay back the mortgage loan, and they can stay in their home virtually for free until title to the home changes hands at a sheriff's foreclosure sale.
This advice is particularly appropriate for those living in a condo development because as long as you are the titled owner to the unit, you will continue to be responsible for condo fees that accrue after the bankruptcy is filed.
Although the discharge does wipe out any fees that accrued before you filed, you are on the hook for them going forward. Thus you can no longer just "walk away" from a condo; you will just end up paying rent at another place, while continuing to pay the fees on the home you left!
So What Do I Do?
Condo fees can really be a burden if you can't afford them and the mortgage. You can walk away from the mortgage through foreclosure, but not the fees. So if you live in a condominium in Burlington, Camden, Gloucester, Salem or Cumberland County, and are thinking about filing bankruptcy, give my office a call at 856-432-4113 or contact me through this site to schedule an appointment to discuss your options.
If you are looking for further information, download my free book, Top Questions People Ask About Filing Bankruptcy in NJ. How you deal with a condo home after you file can have a profound effect on your fresh start.
Not sure if bankruptcy is right for you? Take the quiz to the right to find out more!
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