Legal Question in Real Estate Law in Illinois
How to Clear a Lein Against My Home
In 2007, I filed a Ch. 7 and all debts were discharged. All debts were the result of a failed business investment, and my credit score was 800+ until debts accumulated over a couple years. The bank that provided the business loan maintains a $260 thousand lien against my home, even though all debts were discharged. How can I get the lien cleared? It makes no sense to continue making payments, if they own all future equity build-up. I have a 1st mortgage and credit line with a different lender, which together are about 90% LTV. I have a relatively successful career, and make a low 6 figure salary. However, virtually all savings was depleted and I have an additional obligation to a family member. Combined, they restrict my ability to ''payoff'' the lein holder or make monthly payments. Any assistance and/or guidance would be appreciated. I had hoped my bk attorney would assist me in this matter, but he said it was outside the scope of his responsibility. Thank you.
2 Answers from Attorneys
Re: How to Clear a Lein Against My Home
I wonder why your bankruptcy lawyer did not talk to you about a chapter 13. A mortgage lien is not usually discharged in a chapter 7. Rather, your personal debt is. In simple terms, the lender can foreclose and you would not be responsible for anything owed after the foreclosure.
The lender is not entitled to the build up in equity, rather, just the amount of the debt. If you can not renegotiate to a monthly amount that you can manage, then you need to sell so that you can control the purchase price, rather than letting the lender do so.
Re: How to Clear a Lein Against My Home
I wonder why your bankruptcy lawyer did not talk to you about a chapter 13. A mortgage lien is not usually discharged in a chapter 7. Rather, your personal debt is. In simple terms, the lender can foreclose and you would not be responsible for anything owed after the foreclosure.
The lender is not entitled to the build up in equity, rather, just the amount of the debt. If you can not renegotiate to a monthly amount that you can manage, then you need to sell so that you can control the purchase price, rather than letting the lender do so.
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