Legal Question in Real Estate Law in Illinois

There are two components to a mortgage loan: One is your obligation to pay the money that was loaned to you. You signed a promissory note in which you agreed to repay the lender. The other is the lien against your real estate. This was created by the mortgage you signed. When the first mortgage foreclosed, the lien the second mortgage lender had against your real estate was extinguished. This did not get rid of your obligation to repay the second mortgage. Unfortunately, you still would owe the money you agreed to repay. You might consider talking to a consumer law attorney or bankruptcy attorney to discuss your options.

You may be responsible for any shortfall that either lender had after the home was sold pursuant to foreclosure. Regrettably, if a reasonable settlement cannot be reached, then you should consider fresh start options through bankruptcy. That is particularly true if you have other obligations that are impacting you, if you are borrowing more or if you are using up valuable assets (savings, retirement, etc.).

The scope of this space does not afford an opportunity to assess the situation and advise you. I recommend you assemble for legal consultation: (1) your income information for November 2013 through the present, including wages and unemployment during that period; (2) all your bills (copies neatly assembled, back pages included); (3) last two years� tax returns; (4) a credit report (use www.annualcreditreport.com to obtain free report if not requested in last year); and (5) other information that may apply, such as copies of lawsuits. Call at your earliest convenience to afford the most opportunity in which to be advised about your best course. You are not required to use an attorney in your area.

I do not recommend filing bankruptcy on your own. There are too many complex issues. I have seen several posts on this site for debtors who filed on their own and are seeking counsel concerning complications. Most of them will have a hard time finding an attorney to get involved to unwind the mess without the attorney charging several times what would originally have been paid.