Richmond, Virginia. The interplay of bankruptcy law and the ownership of real property or real estate is often misunderstood. The filing of the bankruptcy petition does not affect one’s underlying ownership interest in real estate. However, the filing of bankruptcy may affect financial obligations related to the ownership real estate.
Property Taxes. Certain property taxes can be discharged inside of the bankruptcy filing. However, the important dates are when the bankruptcy petition is filed (the “Petition Date”) or when the bankruptcy case is converted. After the Petition Date or the date of conversion, whichever is later, absent a sale or transfer of the real estate, property taxes will continue to accrue. In other words, unless the real estate is sold, foreclosed upon, or otherwise transferred, the owner will have a continuing obligation to pay property taxes on the real property.
Homeowners Association and Condominium Dues. This is similarly true with obligations for homeowners association dues and condominium dues. These obligations will continue to accrue so long as the real property stays in the name of the owner.
As these obligations continue to accrue, this can become problematic in the case of a lender that refuses to foreclose on the real estate. Especially in the case of condominiums, these accruing obligations for monthly dues can be substantial. In such cases, your counsel may need to negotiate with your lender in order to transfer the real estate.
With offices in Richmond, Glen Allen, and Hopewell, Ronald Page, PLC services debtors and creditors in bankruptcy proceedings in the Virginia Capitol area including Richmond, Henrico County, Chesterfield County, Hopewell, Petersburg, Hanover County, Caroline County, Powhatan County, Prince George County, Goochland County, New Kent County, and Amelia County.