NC Supreme Court in Dallaire Confirms Liens Survive Chapter 7 Bankruptcy

17
Jun 2014
NC Supreme Court in Dallaire Confirms Liens Survive Chapter 7 Bankruptcy

The Supreme Court of North Carolina’s opinion in Dallaire v. Bank of America, released last week, affirms that Chapter 7 bankruptcy proceedings will not discharge liens on property. This is of particular interest to associations. The court suggests that while a bankruptcy court order can discharge personal liability for such liens, the liens themselves will still be attached to the home or property in question. This is a positive development for associations, as any association with an outstanding lien on a property may still have its obligations satisfied even if the resident declares a Chapter 7 bankruptcy. Collection on such liens was tangentially clarified under Dallaire.