Legal Question in Bankruptcy in Illinois

I owe $310,000.00 on my home mortage and I took out a loan for a business for $175,000.00 the bank filed a lien on the house for the business loan of $175,000.00 the business failed and we owe hte business loan, the bank has sent a letter that they are going to forclose on the house but we owe the first mortage on the home plus the business loan the total amount owed it $475,000.00 can the bank bank sell the house to satisfy the business loan when I still owe the first mortage? can we clam bankrupcy I was told number 13 be owe $24,000 in payments for the business loan the house is only worth $215,000.00

what can we do to save our house?

Asked on 6/15/10, 9:13 pm

2 Answers from Attorneys

Caroline Palmer Law firm of Caroline Palmer
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The bank is second in priority to the mortgage unless they hold the first mortgage as well a the second. This means that if they file a foreclosure action and get a judgment, the first mortgage will be first in line for the money from the sheriff's sale and you will still owe any difference between the amount it sold for and the amount of your debt.

It doesn't matter how much your house is worth, it matters how much you borrowed. Chapter 13 is a structured repayment plan. It will help you keep your home and forestall any foreclosure actions, but the court trustee will design a repayment plan and unless you have a bankruptcy attorney to negotiate for you, what the trustee says, goes.

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Answered on 6/16/10, 4:20 am
Frank Vosholler Law Office of Frank L. Vosholler III
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You can do a chapter 13 and cram down the loan to the value of the home and strip any other liens because the become unsecured.

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Answered on 6/16/10, 6:49 am

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