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If you have fallen behind on your mortgage payments, chances are the mortgage company will attempt to foreclose on your property. Facing foreclosure can be extremely stressful, especially if the property being foreclosed on is your primary residence. Luckily, filing for bankruptcy can help alleviate this stress. Bankruptcy will stop the foreclosure process and help you get back on your feet. In this blog, we will discuss the foreclosure process in Illinois, and how filing for Chapter 13 bankruptcy helps prevent foreclosure. Contact us now at (312) 883-5422 to speak with a bankruptcy lawyer in Chicago for a free consultation.
What is the Foreclosure Process in Illinois?
In general, foreclosure is the legal process that allows a lender to sell your property if you default on your loan. The most common “default” causing a lender to foreclose on your property is failure to make the required monthly mortgage payments. This typically happens after you miss three or more payments.
To initiate a foreclosure, the lender files a “complaint” in state court. 735 ILCS 5/15-1504. Some federal regulations restrict when a lender can file a complaint requiring them to wait until you are more than 120 days delinquent on the loan. Once a complaint is filed, the next step is to serve you with a summons to appear in court. The summons will state you have 30 days to file an answer and any affirmative defenses.
The process of foreclosing and selling property in Illinois takes time. For instance, once served with a summons, you have 90 days to reinstate your mortgage by bringing your loan completely current. This includes the total past-due amount and any costs or fees. 735 ILCS 5/15-1602. Additionally, you have a redemption period. This period lasts seven months from service of your summons or three months from the date of entry of the foreclosure judgment, whichever is later. 735 ILCS 5/15-1603.
When these dates have expired, the lender may proceed with a judicial sale. The judicial sale requires the lender to post notice of the sale and advertise said sale in a local newspaper. If the property is sold, the lender then files a motion confirming the sale and can send the order to the sheriff to evict you. Because of the many intricacies in the foreclosure process in Illinois, it important to speak with an experienced lawyer in Chicago. At DebtPros, our bankruptcy lawyers are extremely knowledgeable on the foreclosure process and will help guide you along the way.
How Does Filing Bankruptcy Help Prevent Foreclosure?
Filing for Chapter 13 bankruptcy will stop the foreclosure process and allow you to repay the mortgage arrears back to the mortgage company. When you file a Chapter 13 bankruptcy, a proposed Chapter 13 plan is filed which lays out how you will repay your creditors back on monthly basis for 3-5 years.
For instance, to save your property from foreclosure, your Chapter 13 plan will propose to repay your mortgage arrears over a specific timeframe. To keep your property, you will also need to make direct payments to the lender in the current monthly amount.
When a bankruptcy case is filed, there is an “automatic stay” that prevents creditors from collecting on pre-bankruptcy debt. As the name suggests, this stay is imposed the second you file your bankruptcy case and is what stops the mortgage company from proceeding to foreclose on your property. As long as the property has not already been sold, the bankruptcy filing will help you keep your property. Apart from your mortgage debt, you can also include any other debt you have in the Chapter 13 case.
Contact us Today to Speak with a Bankruptcy Lawyer!
If you are facing foreclosure, or are behind on your mortgage payments, contact DebtPros today for a free consultation. During the consultation, we will carefully review your circumstances and give you the best advice on how you can save your property from being foreclosed on. We will also let you know if there are other options outside of bankruptcy that may be available to you.
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