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IS BANKRUPTCY A SOLUTION FOR SOME ASSOCIATIONS?
Posted by V.K. [Mel] Melhado P.A. on Tuesday, July 14th, 2009 at 7:36pm.
Is filing bankruptcy a viable option for those condominium associations who have an abundance of foreclosed properties and many in short sale situations and headed that way? That is the question facing some associations primarily located on the other coast of Florida, (to date there have been 7 filings), and although it could be a possibility here as well, there are no real signs of it.
But the real question seems to be whether associations who have filed to form a shield from creditors can actually emerge from bankruptcy protection reorganized and healthy. Not only that, but the price to file in many cases is very costly and with many members not paying their monthly assesments, how will the bill get paid. Just like any corporation who eventually files, you would need an exit strategy prior to filing.
One would suspect that association would be far better off trying to come to terms as far as paying off back debts to creditors rather than go down the tedious path of bankruptcy.
V.K. [Mel] Melhado PA
Downing-Frye Realty, Inc.
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