When you buy into a condominium or townhouse, you will be subject to an association, whose fees, bylaws and rules “run with the land.” By operation of the agreement itself, if you fail to pay the dues (or any additional amounts that are assessed) they become a lien against the property. The dues are also a personal liability. So they can either foreclose, or they can sue you for a judgment. I have seen them do both of these, and what they actually do depends on a few factors.
If you file chapter 7 bankruptcy, your personal liability will be discharged, but any past due association dues will remain a lien on your property. If you are planning to surrender your property, (or sell it, if you have equity after paying the dues), then chapter 7 may be a good option. Sometimes you can even enter into a repayment plan to get caught up with the association and keep your house.
If you want to keep your house and are otherwise unable to get current, you can file chapter 13 bankruptcy, and stretch the past due arrearages over 3 to 5 years.
