The law pertaining to Homeowner Association Fees in a New Jersey bankruptcy case may depend on the judge that is assigned to a particular case. Pursuant to the 2005 amended bankruptcy laws (BAPCPA), a chapter 7 bankruptcy debtor who is surrendering their house, may eliminate and discharge pre filing association fees, but not post filing association fees, until the deed is transferred out of their name. This means that the chapter 7 debtor may be sued for the payments that are due, after their bankruptcy filing, through the date that their house is removed from their name. Once their name is removed from the deed, the debtor will no longer owe any funds to the association, whether the funds were due before or after the bankruptcy filing.
The New Jersey bankruptcy judges differ on the application of this law about association fees during bankruptcy, as it pertains to a chapter 13 case. All judges agree that a person who surrenders their house in a chapter 13, and vacates the house, prior to the bankruptcy filing, may eliminate their prefiling association arrears. However, under this scenario, depending on the judge assigned to the case, one may or may not be able to eliminate the payments that come due after the filing, even though the property is vacated.
This means that if the judge who is assigned to handle a case does not permit the discharge of the post filing association fees, the debtor is obligated to make the monthly payments, after the bankruptcy filing, until their name is removed from the deed. The fact that the debtor is no longer residing in the property and not deriving any benefit from the association, would not effect a judges decision, who interprets the bankruptcy code as such.
You may contact Robert Manchel, the bankruptcy lawyer in NJ., who will answer your homeowner association questions, at 1 866 503 5655.