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26 Emory Bankr. Dev. J. 125 (2009-2010)
Escaping the Death Spiral of Dues and Debt: Bankruptcy and Condominium Association Debtors

handle is hein.journals/bnkd26 and id is 127 raw text is: ESCAPING THE DEATH SPIRAL OF DUES AND DEBT:
In the current financial crisis, condominium associations face rising
numbers   of delinquent member dues, increased         assessments, soaring
foreclosure rates, and crushing association debt. This parade of horribles
creates a circular death spiral of dues and debt, where high delinquency in
dues payment leads to increased assessments, which produces even more
delinquencies. Filing for bankruptcy, particularly under chapter 11, could
present collapsing condominium associations with a means to weather the
economic storm.
Condominiums and condominium associations are integral pieces of the
American residential landscape. Each new condominium is accompanied by a
condominium     association, and   every   condominium    association  holds
significant power over its individual unit owners.1       The condominium
association provides the members with a forum for condominium governance.
Through this forum, unit owners can reap the benefits of collective action, such
as maintenance of common areas and improvement of the condominium
facilities. In order to preserve these benefits, the condominium association can
exercise various powers to ensure member compliance. These powers include
collecting dues, levying assessments for special purposes, and foreclosing on
unit owners who do not comply.
Despite the condominium association's collective action benefits and
corresponding enforcement powers, the current mortgage, financial, and credit
crises place condominium    associations in a precarious position.   Falling
housing prices, slowdowns in nearly every sector of the economy, and
sweeping job losses all increase the likelihood that condominium association
1 This Comment will use the terms condominium, condominium association, and individual units
frequently. The first refers to the entity generally thought of as a condominium complex, complete with its
governing documents, physical structure, common areas, and individual units. The second term is the general
governing body of the condominium, usually comprised of the individual unit owners. In this article, the
condominium association will be referred to sometimes merely as the association for brevity. The last term
refers to an individual unit in a condominium, or colloquially, one condominium in a condominium complex.

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