Loan Modification And Foreclosure In Illinois

It seems like every week, I get a telephone call that generally goes like this:

“The sheriff’s sale was last week. Can you help me save my home?”

I reply, “Why did you wait?”

The  typical answer is: “I was working with the mortgage company on a loan  modification. They said it looked good, so I didn’t do anything.”

Once  there is a sheriff’s sale (or more technically a judicial sale), a  Chapter 13 cannot save your home, but before that date, filing  bankruptcy can aid you in getting a loan modification.


  1. Foreclosures  and loan modifications work on different tracks. Often, the Bank will  orally promise you a loan modification, but it’s a mirage. They continue  on with their foreclosure action, until your home is gone.
  2. Mortgage  companies don’t really want many loan modifications. That is why they  make it complicated; often “losing” files; returning documents for minor  reasons; making it a long drawn out process. If they really wanted to  help they would streamline the process both in terms of paper work and  time. They would have counselors working with you to be sure everything  was in apple pie order before going to the actual decision makers.
  3. Foreclosure lawyers make more money when they actually complete the foreclosure.
  4. Mortgage  companies are not your friends. If they can take your house back then  sell it to another party, they make their money twice: first, by taking a  money judgment against you, and second from reselling your property and  (possibly) giving a new loan to the buyers.


Most  people don’t know you can file a Chapter 13 and still proceed with your  loan modification. Many Chapter 13 clients are able to get their loan  modified while still in the Chapter 13 case. Because you are in a  bankruptcy, the creditor has to stop its foreclosure action and give you  time and space to modify the loan. Even filing a Chapter 7 will stay  the foreclosure temporarily, and give you a better chance at that loan  modification because your budget will improve if you do not owe any  other creditors.


A Chapter 13 stops the foreclosure dead in its tracks.

To  be eligible you have to have sufficient income to pay your current  mortgage, pay some amount to the Chapter 13 trustee to catch up the  mortgage arrears, and have enough money to cover your other expenses.

If  you are in a foreclosure even if you are working on a loan modification  you owe it to yourself to discuss your situation and options with the  lawyers at ROBERT J ADAMS & ASSOCIATES. Our consultation is  Complimentary and confidential.

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