If you are struggling with debt or facing the possibility of foreclosure, you probably have a number of pressing questions.
The foreclosure process can be intimidating and confusing – and facing foreclosure can have serious long-term consequences on your lifestyle, your finances, and your well-being. Facing foreclosure could mean having to vacate your home, lose your accumulated equity, and experience damage to your credit that could have aftereffects lasting for years down the line.
As you look into foreclosure – and the options that may be available to you if you’re seeking to avoid this process, or mitigate its effects – it’s important to get answers to your biggest questions. Here’s a broad look at four of the biggest and most common FAQs about foreclosure in Illinois:
How long does the foreclosure process in Illinois take?
Broadly speaking, the majority of foreclosures in Illinois are judicial foreclosures, meaning that the foreclosure process occurs in the courts, and is governed by local laws – specifically, the Illinois Mortgage Foreclosure Law, or IMFL. After a judgment is entered, the property is typically then sold publicly.
It’s important to remember that no two people are going to have exactly the same experiences with foreclosure. With that being said, generally speaking, the foreclosure process in Illinois typically takes roughly eight to ten months, if not longer, from the time a homeowner defaults.
Local laws are specific about the timelines that must be adhered to during foreclosure by lenders, courts, and homeowners alike. The process can also often be delayed or extended if the homeowner takes certain steps, such as contesting the foreclosure action, requesting delays, or filing for bankruptcy, which can offer the protection of an automatic stay. For borrowers, talking with an experienced local attorney can help you understand the timeline that may play out for your foreclosure process, and start to explore all of the options available to you in your state.
What are the steps of the foreclosure process in Illinois?
Under Illinois law, the foreclosure process often plays out in a similar way, from case to case – though it is decidedly not cookie cutter. Let’s explore the general events involved in the typical foreclosure process in Illinois, including the rights and responsibilities of borrowers:
- Buyer misses payments and defaults. After several missed payments and notices, loan officers will typically hit borrowers with late fees. At a certain point, they will also likely send a breach letter, indicating that the borrower is defaulting and the lender will take action. Lenders must grant the borrower a reasonable grace period to catch up on payments or pursue a mitigation option before pursuing foreclosure.
- Lender files foreclosure suit. Foreclosure begins when the lender files a complaint, meeting all the required elements as detailed by the IMFL.
- Borrower is served with a summons. After the complaint is filed, the homeowner (and other parties with an interest in the property) will be served with a notice and summons. Generally speaking, homeowners have 30 days to file a response. If they do not respond, the lender may be able to pursue a default judgment in the courts, expediting the foreclosure process. This time window will also generally feature a pre-foreclosure review period, in which buyers can contest the lender’s actions, or work with them to attempt to execute a remedy, such as a loss mitigation agreement.
- Foreclosure judgment. If the borrower and lender cannot agree to a solution, the lender will likely pursue a summary judgment, and a judgment of foreclosure will be entered.
- Reinstatement and redemption periods. Under Illinois law, borrowers may reinstate (i.e., pay back past-due amounts, with fees and interest) within a set period after receiving written notice, or submitting to judicial proceedings. The reinstatement period expires 90 days after personal service. Borrowers can also take advantage of a redemption period, a “grace period” during which they must be given an opportunity to pay off their total debts, including their principal balance, fees, and interest. The redemption period typically expires three months after a judgment is entered, or seven months after personal service – whichever ends up being later.
- Notices are given and a foreclosure sale is held. A foreclosure sale takes place following the expiration of the borrower’s redemption period. Public notice must be given prior to the auction, in accordance with local laws. If the property is not sold on this date, possession may revert to the lender. The results of the sale must then be finalized and confirmed in the courts, and a foreclosure deed will be recorded.
- The borrower’s right to possession expires. 30-60 days after the confirmation of the foreclosure sale, buyers will be required to vacate the property.
Important note: Keep in mind that everyone’s circumstances will be unique. The above outline is not intended to be comprehensive, and may not reflect your exact experiences with foreclosure.
Is there a way to avoid or stop foreclosure once proceedings have begun?
Broadly speaking, there are several courses of action available to borrowers facing foreclosure, depending on your unique circumstances. There are many different steps a borrower can take, depending on their situation; generally, these myriad actions fall into a few different categories:
- Bankruptcy. Chapter 7 and Chapter 13 bankruptcy can both offer certain protections to borrowers, which may allow them to move forward on surer financial footing. Filing for bankruptcy, for instance, generally allows people to take advantage of an automatic stay, which can delay the foreclosure process temporarily. In other cases, bankruptcy can allow filers to discharge certain debts and restructure others, which may lessen their month-to-month burden and make sticking to a repayment plan for their mortgage more manageable.
- Loss mitigation. Generally speaking, borrowers can pursue a number of loss mitigation options, depending on their unique circumstances. Some courses of action may allow homeowners to retain possession of their home, and others may mean that borrowers lose their property, but protect their credit score and personal finances. Some common loss mitigation strategies focused on retention include creating a repayment plan (often under a Chapter 13 bankruptcy), requesting deferral of principal, or seeking forbearance and loan modification. Non-retention strategies include pursuing a short sale, offering a deed in lieu of foreclosure, or opting for a consent foreclosure.
- Legal defense. Depending on your circumstances, you and an attorney may be able to pursue a legal defense strategy. It’s important to work with an experienced attorney to thoroughly review the specifics of your case, and carefully examine your loan documents and all of the paperwork associated with the foreclosure, including the complaint, to see if any options apply in your situation.
Again, the above information is not intended to be comprehensive. In many cases, the best way to understand all of the options available to you may be to consult with an attorney in your area who is knowledgeable about the foreclosure process. An attorney can get a handle on all of the unique variables of your situation, and help you explore the solutions that may be most effective for you, based on your unique circumstances.
Where can I turn for help?
As we have noted already, one of the best partners to work with if you’re struggling with debt or facing the threat of foreclosure is an experienced real estate or bankruptcy attorney in your area, with a comprehensive knowledge of your local foreclosure process. A foreclosure attorney can assist you in many different ways, including helping you to assess all of your options, develop a workable strategy, respond to actions taken by your lender or the courts, and gain protection from certain actions by creditors.
Have any more questions? Want to keep the conversation going?
If you have any questions about your unique situation, don’t hesitate to get in touch with the attorneys and staff of the Gunderson Law Firm. The Gunderson Law Firm possesses unparalleled expertise and insight on real estate, bankruptcy, and foreclosure in Chicagoland and Illinois more broadly, reinforced by years of experience and long-term connections throughout Chicago’s real estate, finance, and insurance industries.
Above all else, we are committed to providing the advocacy you need without the attitude you don’t. If you have found other lawyers to be more about their egos than about your case, talk to Gunderson Law Firm. Our attorneys are not only highly knowledgeable and experienced, but very down-to-earth. We’re all about great representation and timely results, tailored to your unique circumstances. Drop us a line whenever you’re ready to keep the conversation going.