Stop Foreclosure in Chicago & Avoid Losing Your Home

19-Feb-2010 The quickest way to stop foreclosure in Chicago and avoid losing your home is an automatic stay provided by a bankruptcy filing. When you file for bankruptcy, it triggers the bankruptcy court to issue what is called an automatic stay. This stops all creditors from any action to collect their claim, including foreclosure. 

What an automatic stay can prevent:

  • Foreclosure: The automatic stay will stop foreclosure proceedings in the short term. However, in the long term, Chapter 13 is your best bet for allowing you to keep your home in bankruptcy. Chapter 13 stops foreclosures.
  • Eviction: The automatic stay may temporarily halt the eviction process, unless your landlord has already obtained a judgment against you at the time of bankruptcy filing. If not, you may get a reprieve for a few days or weeks before your landlord will likely ask the court to lift the stay and allow the eviction to move forward.
  • Utility Disconnections: You will have at least 20 days provided by the automatic stay before your utilities can be disconnected due to nonpayment.
  • Creditors & Collection Agencies: With a few exceptions, the automatic stay will immediately stop lawsuits and other actions filed against you by creditors, collection agencies or government entities. This includes repossession, collection calls, and garnishment.

Exceptions to the automatic stay:

  • Selective Tax Proceedings: You can still be audited by the IRS, required to file a tax return and pay any subsequent tax assessments. However, the IRS cannot file a tax lien or seize your property or income under the automatic stay.
  • Legal & Criminal Proceedings: Lawsuits related to support payments (child support, alimony, etc.) are not affected by the automatic stay. Neither are criminal proceedings, although if there is an accompanying debt component to a charge, only the criminal charge is likely to move forward.
  • “Lifting” the Stay: Creditors are likely to ask the bankruptcy court to “lift” the stay in certain situations. If the request is reasonable, the court is likely to grant permission for actions against you to move forward.
The automatic stay remains effective until a judge lifts the stay (see above) for one or all creditors, a discharge is granted to the debtor and the stay becomes permanent, or the item of property is no longer in the possession of the debtor.

There are many components of the bankruptcy process, and it is best to take early steps to avoid foreclosure and other actions against you by your creditors. Chang & Carlin LLP can help you review these steps and avoid foreclosure in the Chicago, IL area. Contact us today to find out what your options are, and if Chapter 7 or Chapter 13 bankruptcy can help stop foreclosure on your home.

Chang and Carlin
The content found on the Chang & Carlin site is not legal advice and is purely for informational purposes. The information contained herein is not a substitute for the advice of an attorney and does not create an attorney-client relationship. If you are interested in obtaining information about chapter 7 bankruptcy, chapter 13 bankruptcy, foreclosure services, real estate legal services, you are encouraged to call our law firm at 866-790-8601 or Request a Free Legal Evaluation. Chang and Carlin serves clients in Chicago, Schaumburg, Joliet, Warrenville, Waukegan, Illinois.