03-30-2007 Bankruptcy debtor must maintain property, court says

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o�sou TH F dx :J b W eFacE � � y� a 1, a2 1865 Office of the Mayor NEWS RELEASE March 30, 2007 2:00 p.m. Contact: Mikki Dobski, Director of Communications&Special Projects, 235-5855 or 876- 1564, or Ann-Carol Nash,Assistant City Attorney, 235-5867, or Catherine Toppel, Director of Code Enforcement, 235-5914 Bankruptcy debtor must maintain property, court says The City of South Bend has won a major court ruling that gives teeth to its efforts to require real-estate owners in bankruptcy proceedings to adequately maintain their properties. The ruling Tuesday(March 27, 2007) by Judge Harry C. Dees Jr. of the U.S. Bankruptcy Court for the District of Northern Indiana determined that property owners cannot avoid the obligations of maintaining their properties while in chapter 7 bankruptcy proceedings. In addition, the owner continues to have the same property maintenance obligations after the bankruptcy as long as the debtor owns the property. Dees also ruled that debtors cannot push those obligations onto a lender holding the mortgage lien, if the lender does not foreclose on the property. And fines imposed for code ordinance violations are not subject to the usual stay on fees imposed during bankruptcy because they were the costs of reimbursing the city for clean up or safety repairs, the court said. "A clean city is everyone's responsibility," said Mayor Stephen J. Luecke, who said the ruling is critical to the city's efforts to address vacant and abandoned properties. "As the City aggressively attacks the problems of vacant and abandoned properties, this decision will help us keep the pressure on owners who attempt to avoid their obligations to keep their own properties safe, secure and clean." "The problem of people seeking bankruptcy protection and abandoning properties