Maryland residents who bought condominiums may have done so through arrangements that require periodic payments to repay the loans that were secured to purchase their units. That arrangement works well as long as a condo owner has no financial hardships. When unpaid bills begin to mount and life forces unexpected changes, an owner may face unsavory options such as bankruptcy or foreclosure.
To stop foreclosure, homeowners or condo owners who need debt relief can consider filing for bankruptcy under Chapter 7 or Chapter 13.
Recently, a decision by the Montgomery Commission on Common Ownership Communities, and upheld by a Maryland court, paves the way for interested parties, including the common ownership communities, to shame delinquent condo owners into making payments by publicly naming them. The thought is that the proposed publication of delinquent homeowners’ names by an association would embarrass people into making payments on outstanding debt, according to proponents. Others believe such disclosures would be unacceptable infringements of individual privacy.
A Maryland court, however, has also required that such lists be not only accurate but also subject to confidentiality agreements and prior notification of delinquent owners.
Any unit owner who has legitimate reasons for being behind in payments can privately explain the problem to an association board in executive session and perhaps work out a payment plan that satisfies both parties – as long as the agreement is in writing and signed by the owner and a member of the board.
Delinquent owners forced to choose between making payments or agreeing to such disclosures might look closely at declaring bankruptcy instead and might be surprised to find out that a Chapter 7 proceeding only requires that certain assets be liquidated so proceeds can be used to pay creditors. Liquidation exempts some properties and assets. Among Chapter 7’s other benefits are legal restrictions on creditors making calls demanding payment. Contact a Rockville Maryland Chapter 7 Attorney to see if this type of filing is right for you.
Source: The Washington Post, “Montgomery condos must disclose names of delinquent owners,” Benny L. Kass, April 4, 2014.