My condominium is in foreclosure – what happens in bankruptcy?
Posted on Feb 8, 2009 in Bankruptcy, Chapter 7, Foreclosure - Saving Your Home
If you own a condo and it’s in foreclosure, you may be facing bankruptcy. This is particularly true if your mortgage balance is now much greater than the value of your condo. You may find that it is cheaper to rent somewhere else than to keep paying on the mortgage after bankruptcy.
If your condo is in foreclosure, however, you have to be very careful about the timing of your bankruptcy. This is because your bankruptcy will result in a discharge only of debts which existed at the time you filed your bankruptcy case. Condo associations are strapped for cash. You remain the owner of your condo until the mortgage lender finishes the foreclosure and actually gets a deed to your property. So you could remain liable for condo assessments, fees and even special assessments after the filing date of your bankruptcy.
So, it’s in your interest to live in the condo until the foreclosure is complete. This way you get the benefit of your condominium assessments. You prevent damage to the unit. You limit your potential liability to the condominium association when you can least afford it.
Lakelaw helps people file bankruptcy and defends people against mortgage foreclosure.