Legal Question in Real Estate Law in Illinois
A few years ago my husband and I had to claim bankruptcy but kept our home. We have continued our payments and kept up with them so far. On our monthly statement there is a paragraph about this debt being discharged in our bankruptcy and if we stop paying foreclosure proceeding will start. What I want to know is what that means to us legally. At this time our house is not worth what we owe on it and our payment is above what we can afford. Can't get assistance because we owe more than 110% loan to house value and our payment isn't over 33% of our gross income, darn close. So what does that paragraph mean to us?
1 Answer from Attorneys
You should consult with the attorney who handled your bankruptcy to check the documents and the court docket, but more likely than not you did not reaffirm the debt. That would mean your personal obligation would have been discharged. If correct, the lender can enforce the debt against the property (foreclose), but cannot seek to collect any deficiency from you. You may need to be careful, however, concerning other obligations that may be post-bankruptcy or may come before foreclosure is complete, such as association fees, if any, municipal liens for things like mowing the lawn, liabilities that occur on the property until it is sold in foreclosure (suggest keeping up on your insurance), . . . Again, consult with your attorney.
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