What must be done when an owner declares bankruptcy?

When an owner declares bankruptcy, it is essential to recognize that the bankruptcy process involves the financial restructuring of the debtor's obligations. A key aspect of this process is the treatment of debts incurred before the bankruptcy filing. By creating a new account for post-bankruptcy charges, the community association can effectively separate future obligations from debts that were included in the bankruptcy proceedings. This allows the association to continue to manage the financial relationships with the owner while ensuring that they comply with legal requirements related to the bankruptcy.

In the context of bankruptcy, the prior debts are typically subject to discharge, meaning they may be eliminated or restructured. Therefore, establishing a new account is crucial for any charges incurred after the bankruptcy declaration, enabling the community to recoup ongoing dues or fees without infringing upon the legal protections afforded to the owner under bankruptcy law. This practice supports the effective management of the association's finances while also respecting the owner's bankruptcy status.