Being a homeowner can be stressful enough and it can be downright devastating if you find yourself facing the possibility of losing your home to foreclosure. There are a number of reasons individuals might be facing foreclosure, but it's important to understand that there are steps you can take to try to prevent it.
That’s why we will explore some of the options available to homeowners in Illinois who are facing foreclosure. We’ll also explore some of the rights that defendants in a foreclosure case have under state law, and discuss what that may mean for those facing foreclosure in Illinois.
Defendant Rights - Foreclosure
Importantly, if your home is foreclosed on, in the state of Illinois, you have rights. One of those is the simple right to be notified of the foreclosure proceedings. Plaintiffs in foreclosure are required by Illinois law to send notice of the foreclosure to the mortgager who is to become a defendant in the foreclosure.
To ensure that you’ve received proper notice of foreclosure, or that the lender has followed the correct procedures in attempting to notify you, it can be important to consult with a bankruptcy attorney who can help you navigate the foreclosure process.
Redemption Period
In Illinois, defendants in foreclosure have a redemption period, which can last for several months. Within that period, you may have the right to regain possession of your property by paying off all relevant debts. For residential mortgages, this period will be either 7 months from being served with a foreclosure summons (from the point at which all mortgagers, if applicable have been served) or 3 months from the date on which a foreclosure judgment was entered.
In order to determine when your redemption period may be, it can be helpful to consult with a bankruptcy attorney who can help you determine what your time frame and options are.
Preventing The Sale of Your Home
Homeowners in Illinois who are facing foreclosure have a few options available to them. They can try to work out a payment plan with their lender, apply for a loan modification, file for bankruptcy, or sell their home. If the foreclosure process has already started, they may be able to file a motion to stay the sale or to have the sale set aside.
Working With Lenders - Loan Modification and Payment Plans
Illinois residents who are facing foreclosure may be able to work with their lenders to prevent a judicial sale. A loan modification can change the terms of the mortgage, making it easier for the homeowner to afford the payments.
Lenders may also be willing to work with homeowners to create a payment plan. This may be a viable option for homeowners who may not be able to qualify for a loan modification. The payment plan will outline the amount of money that the homeowner needs to pay each month, and the lender will agree not to foreclose on the property as long as the homeowner makes the payments.
Bankruptcy - Automatic Stays, Debt Discharge, and Repayment Plans
Homeowners in Illinois may be able to use bankruptcy to avoid foreclosure—but it isn’t guaranteed. That’s why it’s often crucial to first consult with an experienced bankruptcy attorney, who can help you understand the law, and represent you in court.
Chapter 7 bankruptcy may enable borrowers to keep their homes if they have equity, but the lender may get a deficiency judgment. Additionally, should the homeowner receive a discharge of their mortgage debt, they may be able to stop the foreclosure process. Chapter 13 bankruptcy can sometimes allow homeowners to keep their homes if they can make monthly payments.
The automatic stay prohibits creditors from taking action to collect debts after a bankruptcy filing, including foreclosure. The stay goes into effect immediately and remains in effect until the case is over. However, there are exceptions, such as if the homeowner has abandoned the home or is likely to be able to repay the debt. If the automatic stay prevents foreclosure, the lender can file a motion to lift it. The lender must show that the homeowner is unlikely to be able to repay the debt or has abandoned the home.
As each case can be complex, and bankruptcy doesn’t automatically guarantee that a foreclosure won’t happen, it’s often crucial to consult with a bankruptcy attorney, who can help you understand your options and how the law may apply in your unique case.
Additional Considerations
While there are a number of avenues that those facing foreclosure can take in an attempt to preserve their property, each case is unique. There are a wide range of factors that can impact the outcome of a foreclosure attempt, and it can be important to consult with an experienced expert who can help you determine which course of action may be best for you. Some of the factors that can be important in a foreclosure case include the amount that’s owed on the home, the reason for the foreclosure, and the defendant’s financial situation.
Consulting with a financial expert or lawyer such as a financial planner, a debt relief expert, or a bankruptcy attorney can be a helpful way to better understand your options, your rights, and what may be a viable path forward for you.
If you’re looking for a bankruptcy attorney in Chicago, don’t hesitate to reach out today, by phone. At Joyner Law Office, we’re committed to helping our clients find their optimal outcomes and preserving their rights.