Posted on May 15,2017 in Mortgage Foreclosure

For mortgage lenders, property foreclosure is a complex yet effective method of retrieving debt when borrowers fail to make mortgage payments. A successful foreclosure can allow the creditor to sell the property and recover a large share of the borrower’s debt. In Illinois, all foreclosures must go through a court. A judicial foreclosure allows legal protections for both sides but can draw out the process. A creditor must follow a set of legal procedures in order for a court to approve the foreclosure.

When to Foreclose

If you are a mortgage lender, you may start considering foreclosure when a borrower misses a scheduled mortgage payment. However, you must give the borrower amble opportunities to pay the mortgage before you can request foreclosure in court:

• Loan agreements typically have grace periods for when the first mortgage payment is late.

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 Posted on May 01,2017 in Bankruptcy

Bankruptcy is one of a debtor’s most powerful tools to avoid paying off debt owed to a creditor. If granted bankruptcy, debtors may be able to absolve themselves from responsibility for some of their debts. When a debtor files for bankruptcy, the court can place an automatic stay on the creditor’s debt collection efforts until it decides on the bankruptcy case. Creditors can object to the automatic stay or the bankruptcy claim. Creditors have two types of bankruptcy they most often deal with, each having a different effect on their ability to collect debts.

Chapter 7

Chapter 7 bankruptcy is considered favorable for debtors who do not own many high-value assets. In order to qualify for this form of bankruptcy, the debtor:

• Must have a monthly income that is less than the median monthly income for households of the same size; or

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 Posted on April 05,2017 in Debt Collection

Of the many means creditors can use to collect debt, wage deduction is considered the final option when all other methods have failed. The process involves working with the debtor’s employer to have money deducted from the debtor’s wages to pay to the creditor. It is often called wage garnishment, but garnishment can actually refer to a separate legal action that takes money from debtor monetary sources other than wages, such as bank accounts and money owed to the debtor. If a creditor is seeking money through a wage deduction, there are legal procedures they must follow.

Filing for Wage Deduction

Before filing a Wage Deduction Affidavit in court, the creditor must notify the involved parties:

• Debtors must receive a wage deduction notice, explaining how much money can be deducted from their wages and their right to a hearing to dispute that amount.

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 Posted on March 28,2017 in Debt Collection

A crucial step to ensure your foreclosure complaint is filed quickly is to provide your attorney with the necessary documents for review. The documents your attorney needs are:

• Any demand letters, notices, or pre-foreclosure correspondence sent to the mortgagor(s);
• A copy of the executed Note/Credit Agreement and Disclosure;
• A copy of the executed and recorded Mortgage/Deed of Trust;
• All endorsements or allonges;
• All assignments of mortgage, whether or not they were recorded;
• Any documents showing acquisition or merger;
• Any modifications or change in terms agreements;
• Title report, if ordered;
• Appraisal, if available; and
• Current payoff, including principal balance, per diem, past due payment/maturity date, and interest rate.

Also, it is important to advise your attorney whether you have possession of the original Note/Credit Agreement and Disclosure and Mortgage/Deed of Trust. This ensures you are prepared in the event that the mortgagor(s) raises this issue during the foreclosure proceeding in an answer or discovery.

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 Posted on March 17,2017 in Debt Collection

One of the first steps creditors take when owed money by a debtor is to try to collect the debt themselves without going to court. The creditor may contact the debtor directly or hire a debt collection agency. While debt collection agencies can be effective, there are federal laws in place to protect debtors against what are seen as unfair practices by collection agencies.

The Fair Debt Collection Practices Act outlines how debt collection agencies may contact and interact with debtors. If a court finds an agency in violation of the act, the agency may owe damages to the debtor. The Act does not apply to the creditor, but the result of a collection agency violating the Act may be the failure to retrieve the money the creditor is owed.

Creditors should understand what debt collection agencies can and cannot do. Choosing an agency that violates the law will delay and complicate the collection process, likely requiring further legal action.

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