When buying property through a mortgage, the question naturally arises, what happens if you fail to make payments on time. If you are unable to pay as agreed for any reason, a complex process called foreclosure may begin. Read below about what it is and how to stop foreclosure in Illinois.
Foreclosure Definition
In legal practice, foreclosure is a process in which a lender, e.g., a bank, tries to obtain its guarantees (your property) to recover losses due to your non-payment. Of course, nothing like this will happen if you are late with one payment. However, you face prosecution if you miss two or more transfers in a row. Under Illinois law, a creditor must resolve such matters through the court.
Main Stages
The nuances of judicial foreclosure may vary from state to state. Besides, each case has its own characteristics. On average, if we talk about Illinois, the process looks like this:
- After the first late payment, you still have some time, a kind of grace period (usually about two weeks), during which you can pay. You will receive reminders to provide money, but banks do not involve lawyers at this stage.
- If you don’t make a payment after the grace period, the appeals, letters, and calls of creditors will become more “tough.” All this will continue for 90 days. During this time, if you have a difficult financial situation, you might miss the second payment.
- After the specified period, the bank may apply to the court to recognize the possibility of foreclosure concerning your property. You will receive a notice of the claim and have approximately 30 days to respond.
- If you don’t answer and don’t take any action, the court will decide in favor of the creditor without your participation. After that, you will have another 90 days to pay off the debt.
- If you are unable to deposit the required amount of money, your property will be sold. You can still live in this house for the next 30 days, but you must move out after the deadline.
As a result of such proceedings, your credit score will be seriously damaged.
How to Stop Foreclosure
There is a way out even from the most challenging situation. You should not fall into despair and seek help from the first person who offers it since there is a high probability of running into scammers. Ask for help from specialized services that deal with foreclosure issues. They will analyze your financial condition and advise the best solution to the problem.
You should be aware that debt settlement or loan modification is rarely possible with mortgages. The most effective option is Chapter 13 Bankruptcy. As part of this method, you can avoid foreclosure, even if the process is already underway, save real estate, and significantly reduce your debt. After filing for bankruptcy, the so-called “automatic stay,” which temporarily suspends the proceedings, takes effect.
Forewarned Is Forearmed
Foreclosure is a really frustrating process that can be experienced by anyone unable to meet their financial obligations. In this situation, it is important not to panic but also not to sit still. If you do not know your rights and obligations regarding your property, consult with experts.