What can an association do if the debtor does not keep current on the payment of assessments coming due after filing for bankruptcy?
If a debtor fails to stay current on assessments coming due after the date of the filing of bankruptcy (the “post-petition assessments”), the association can ask the bankruptcy court to lift the automatic stay in order to allow it to continue with collection activity. This request is made by a written motion usually entitled a “Motion to Lift Stay”. The court will conduct a hearing on the motion, unless the motion is unopposed or unless the parties can agree to a resolution of the post-petition delinquency. Because bankruptcy courts are courts of equity, the bankruptcy court judges will typically not lift the stay unless the debtor is at least six (6) months delinquent in the payment of post-petition assessments. Even then, the bankruptcy court judge will typically allow a debtor an opportunity to cure post-petition delinquencies before lifting the stay. Given this, we generally attempt to reach an agreement whereby the automatic stay is modified to allow the association to foreclose w
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