COLLECTIONS AND FORECLOSURE

BANKRUPTCY
“What are the benefits or damages to an association declaring bankruptcy due to excessive delinquencies/foreclosures?”

Bankruptcy will not generally be a good remedy for an association. Since associations have the ability to collect assessments to satisfy their debts and have ongoing maintenance duties to their members, it will be difficult or impossible to discharge an association debt in bankruptcy. An association contemplating bankruptcy should confer with bankruptcy counsel to explore the issues.