"What Happens Now"-Association Lien Enforcement (Post Bankruptcy)

       There are generally two recognized types of legal jurisdiction in Tennessee.  Personal jurisdiction (in personam) and jurisdiction against property (in rem).    

       Bankruptcy is jurisdiction over the person (in personam).  The idea is that debts owed by the debtor get discharged and the debtor (homeowner) may start over fresh. 

       When an association records a lien, the lien secures the homeowner’s unit or house as collateral for the amount of unpaid association assessments and related fees (in rem). 

       What that means to your association is that a homeowner who receives a discharge in bankruptcy, is relieved from the personal obligation to pay any of the unpaid assessments which accrued prior to the date that he filed his bankruptcy petition.  The lien filed by the association however, is not discharged in the bankruptcy. 

       Although the association cannot pursue a homeowner (personally) for debts discharged in bankruptcy, if the lien was recorded prior to the bankruptcy, and the homeowner requests a full release of the lien after his bankruptcy discharge, the association may require the homeowner to pay ALL unpaid association assessments and related fees (including those which accrued prior to the homeowner’s bankruptcy petition), before a full release of lien will be recorded.