This question comes up a lot from our association clients, who are often unsure about how to proceed, for fear of violating the automatic stay. Many associations know they should refrain from seeking collection efforts against homeowners for outstanding pre-petition assessments, but what about post-petition assessments? Further, can the association attempt to recoup pre-petition assessments without violating the automatic stay?
Case Study – Montalvo
A recent decision in In re Federico Augusto Montalvo, 546 B.R. 880 (M.D. Fla. 2016) addressed these issues. The owner of two condominium units filed Chapter 13 bankruptcy and specified in his Chapter 13 Plan that he was surrendering his interest in the units, although he held title to units during the pendency of the bankruptcy case.