Archive for the ‘Uncategorized’ Category

August 12, 2015

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Just getting back into this now that the posting is a bit easier.  It has been 18 years since I last had a Chapter 11 case in the office. I have two going right now.  Motions under §506 have not changed all that much.  They are still a powerful tool and can be very helpful for debtors.  In my next few posts, I hope to look at some of the issues with this type of motion and how debtors can use them to write down secured debt or to divide claims in to secured and unsecured portions.

I am also going to make this blog a bit more personal and talk about some issues that are not legal in nature.   Right now I am trying to figure out what to do with the 18 pounds of tomatoes the garden produced yesterday and the several more pounds it will produce today.

HOA dues – why they never stop…. Another example of unintended results.

December 5, 2012

When congress passed changes to the Bankruptcy Code in 2005, it is a pretty sure bet that they did not think about lenders waiting years after defaults to foreclosure on properties. However, that is what is going on now and under 11USC § 523(a)(16) homeowners who have long since moved out of a home or apartment are still being hit with big bills for HOA or condo dues. That is because this provision was written to protect home owners associations or condo associations from having to supply services to deadbeat owners that were still living in the properties. However, because the law was written broadly it hits folks that have abandoned the property to the creditors and moved out for so long a they retain any legal, equitable or possessory ownership interest in the property. Those interests are not fully extinguished until the lender actually finishes a foreclosure. So lenders, even if they have taken possession of the property and are trying to sell it, are not going through the formal foreclosure process until they have to and are sticking the former owners with the HOA dues. I should add that this only applies to post bankruptcy filing dues. Dues that were assessed but unpaid prior to the filing are discharged.

There is not a sure way around the problem. In some jurisdictions, the debtor can record a Quit Claim deed to the property that gives legal title to the lender. If there are open taxes or other charges it is not always possible to get the local recording official to accept the quitclaim deed for recording. There is also the problem of trying to figure out who is the actual lender so the quitclaim deed can be made in favor of the correct party among the many servicers and transferees that have held the loan over its life.

Daniel Carroll
danc@carrollandferguson.com

December 5, 2012

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