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Bankruptcy Mortgage
Chicago Bankruptcy Lawyers

You have options for your mortgage in bankruptcy.You can keep your home. In a Chapter 7 bankruptcy filing, you have three options with respect to each of your secured debts: (i) reaffirm, (ii) “retain and pay” or (iii) surrender. If you reaffirm the debt, you agree to continue paying the debt under the current terms of the mortgage without modification and you continue to be personally liable for the mortgage amount. In order to reaffirm your mortgage, you must be current on your mortgage payments.

You should make sure to consult with an experienced bankruptcy attorney before making the decision to reaffirm a mortgage, especially given the current state of the real estate market, in which refinancing or selling the property are not always options if you subsequently default on the mortgage. Loop Bankruptcy law firm, a service of Lakelaw, is led by attorney David Leibowitz, a nationally recognized authority on mortgage defense.

If you decide to “retain and pay” the mortgage obligations, you continue making monthly mortgage payments without retaining personal liability. However, your payments on the mortgage will no longer be reported on your credit report.

Chapter 7 Bankruptcy gives you options. Call Now: (866)525-3529

If you are not current on your mortgage, you can indicate that you intend to surrender your interest in the home and your personal liability on the mortgage will be discharged.It is important to note that you do not actually surrender your homethrough the bankruptcy process, but rather the creditor will pursue foreclosure in state court and obtain possession of the property.

Keep your home through a Chapter 13 bankruptcy. Contact us now.

A Chapter 13 bankruptcy allows you to come current on your mortgage obligations and reinstate the loan by curing the default over a period of five years. Although you cannot modify the terms of the mortgage, you maymodify the rights of junior lien-holders. In other words, if your house is worth less than the first mortgage on it, you can strip the second mortgage of its secured status. As a result, the junior mortgage(s) will then be treated as an unsecured creditor under the repayment plan.

For example, if your home is worth $100,000 with first mortgage of $125,000 and a second mortgage of $75,000, the second mortgage can be stripped of its secured status. The mortgage company then has an unsecured claim for $75,000 in the bankruptcy case, which would be paid the same percentage as the other unsecured debts. The second mortgage remains a lien on the property until the debt is discharged upon completion of the Chapter 13 plan period. Even though the first mortgage is unsecured by $25,000, the first mortgage balance is not reduced.

Foreclosure proceedings require prompt action to meet strict deadlines. Our skilled bankruptcy attorneys will help you manage the foreclosure process.

 Contact Us (866)525-3529 Chicago, Cook County, Lake County

When you are served with an Illinois foreclosure complaint, you have 30 days to answer the complaint and file your appearance, but you will not be evicted from your home in 30 days. If you fail to respond to the foreclosure complaint within 30 days, the bank will receive a judgment in their favor. Within 3 months of receipt of the foreclosure complaint, you have the right to reinstate the mortgage loan by coming current on any missed payments, including late charges and attorneys’ fees. You also have a statutory right to “redeem” the mortgage loan by paying off the balance of the loan in full within 7 months from the receipt of the foreclosure or 3 months from entry of a judgment in the creditor’s favor, whichever is longer. This is typically accomplished by refinancing the loan or selling the home, but it may also be accomplished by a successful permanent loan modification.

Learn how bankruptcy can help you deal with the threat of foreclosure.

 Contact us now for a Free Consultation.

Bankruptcy can be a helpful way to deal with the threat of mortgage foreclosure, either by obtaining a longer reinstatement period through a Chapter 13 bankruptcy, or discharging personal liability in the home through either a Chapter 7 or 13 bankruptcy. If you plan to surrender the property and discharge the mortgage liability, and have no other debt, you may want to wait until the foreclosure process is complete to file bankruptcy if it becomes necessary due to a deficiency judgment. A deficiency judgment is obtained by the bank when the sale of the property yields less than the bank is owed on the balance of the mortgage. Many times creditors don’t pursue a deficiency judgment, which may render bankruptcy unnecessary unless you have other debts.

Protect your home. Contact us now to schedule a Free Consultation with a skilled Illinois bankruptcy attorney to learn how we can help you handle your mortage in bankruptcy.

(866)525-3529 Chicago, Cook County, Lake County