The Illinois foreclosure process can be complex and have long-lasting financial repercussions. In the state, lenders can also get a deficiency judgment against defaulting borrowers to acquire an outstanding balance of a loan post-foreclosure. At this point, borrowers should consider hiring an experienced and determined Warrenville foreclosure defense attorney.
What Is A Deficiency Judgment?
A lender can ask the court to pass a deficiency judgment if they want to pursue an outstanding balance on a loan after a property is foreclosed. The debt and other charges are supposed to be paid from the proceeds. If the amount you get from the proceeds cannot cover the debt, you will still need to pay the remaining balance as per the deficiency judgment.
Types of Deficiency Judgments
There are two types of deficiency judgments you can face:
An in personam deficiency judgment is issued against borrowers. In this case, they are personally liable for the deficiency, which lenders can collect through their wages, via their bank account, or by securing non-exempt assets.
An in rem deficiency judgment is passed on the property itself i.e. the borrower redeems the property by paying the outstanding balance to the bank with additional fees and interest. In this case, the lender can place a lien on the property for any remaining balance on the debt post redemption.
Let’s place both deficiency judgments in perspective with an example. Say you owe over $500,000, and your property sells for $300,000. In this case, $200,000 is the deficient amount. If the lender files a lawsuit against you and gets an in rem or an in personam deficiency judgment, you are legally obligated to pay them back as per both judgments. If you fail to do so by closing your bank account or refusing to pay, the lender may sell the judgment to a collection agency.
The best course of action if you receive an in personam deficiency judgment is to file for bankruptcy. For example, you can eliminate the judgment by filing for Chapter 7 bankruptcy. If you file for Chapter 13, on the other hand, you may have to repay a part of the debt via a long-term payment plan. In either case, you need an experienced Warrenville foreclosure defense attorney in your corner.
Get In Touch With Covert Marrero Covert For A Consultation Today!
If you have received a foreclosure notice, we understand how stressed you must be. Receiving one can be one of the most traumatizing events you can face, especially if you have a family to support. The process can be pretty complex, and if you also receive a deficiency judgment, you face an uphill battle without an attorney.
From ensuring your paperwork is filed correctly to formulating practical strategies tailored to your needs, the lawyers at Covert Marrero Covert LLP can prove invaluable. We understand that you have to act quickly after receiving the notices and can work out a payment schedule with the lender on your behalf. Get in touch with us for more options from an experienced Warrenville foreclosure defense attorney today! We only have your best interests at heart.