Foreclosure in Illinois is a judicial foreclosure which means that it is administered by the courts.  Specifically, the foreclosure is filed as a chancery case in that division if there is one in the county your property is in.   The first step in foreclosure is that the lender will send out a notice of acceleration and a fair debt letter to the borrower, which is usually sent when the borrower is 3-6 months behind on their mortgage.   Second, the foreclosure firm will due a title search on the property to make sure all parties are listed properly in the foreclosure such as other lien holders, any other liens on the property, and any other persons in the chain of title who have an interest in the property.
        The complaint is filed with the court in the county that the defendant lives in or in Federal Court in some instances.  The complaint is the start of the lawsuit, and must list

A)  the date of the mortgage
B)  the names of the mortgagor and mortgagee
C)  the date and place of recording of the mortgage
D)  the interest that is subject to the mortgage
E)  the amount of the mortgage indebtedness
F)  a statement of the default (there must be a default)
G)  a legal description of the property
H)  and any parties in interest to the property among other things

      A copy of the original mortgage will also be attached as well as any assignments or proof that the plaintiff has the capacity to file the foreclosure against the defendant.   The Defendant has 30 days to answer the complaint after service and present any defenses to the foreclosure.  If the defendant does not answer the complaint then the plaintiff will often move for a default judgment.  If the defendant answers the complaint and files an appearance then the foreclosure may go to trial, although most defendants do not file an answer.
      For residential property, the redemption period will expire seven months from the date of service of process or the date the Court obtains jurisdiction over the defendant or three months from the date judgment is entered. There is a six-month redemption period for non-residential property.      Redemption is your right to bring the mortgage fully current by paying any arrears with any interest and costs that the plaintiff incurred.  The right of redemption may be shortened if the property is abandoned by the defendant to 30 days, but the plaintiff must prove this.   Once the judgment is entered the borrower has a minimum of a 90 day statutory right of redemption of the property. 
       During this time the plaintiff will request a judicial supervised sale of the property.  The sale may not be held until after the expiration of the redemption period usually six months after the judgment is entered for residential real estate.   The foreclosure sale or sheriffs sale is where the bank or investor buys back the property from the borrower.  In practical terms this is the last date for the defendant to file a Chapter 13 bankruptcy (Learn More about a Chapter 13) to cure any mortgage arrears pursuant to Colon v. Option One Mortgage (7th Circuit) which is binding in Illinois or bring the mortgage fully current by reinstatement by paying all arrears, interest, attorney fee's, and sending written notice to the mortgage company (i.e. their attorneys).    It is important to note that the defendant will normally not get any notice of the sheriff sale or foreclosure sale unless they filed an appearance in the foreclosure, because the foreclosure firm will publish the sale in newspaper circulating in the area for 3 weeks. 
       The sale is not final until the court approves the sale which is usually 30 days after the sheriff sale.  Nevertheless, the sale will be approved unless the court finds that one of requirements was not met, notice was not given or is defective, the terms of the sale were unconscionable, the sale was conducted fraudulently, or that justice was otherwise not done.  It is extremely important to note that most sales are approved by the courts and the sheriff sale is extremely difficult to overturn once it has happened.  
        At that time, the judge will normally approve the sale and may allow for a personal judgment against the defendant for any deficiency.   If a personal deficiency is filed against the defendant (borrower) then the person should likely file a Chapter 7 Bankruptcy to eliminate the claim against them.   At the confirmation of sale a foreclosure deed will be issued to the mortgage company, and if the mortgage company was the only bidder at the sale then the defendant has a special 30 day right to redeem the property by paying off the entire mortgage plus any fees and costs.  At the time of the expiration of the right of redemption (after confirmation of the sale) the mortgage company gets possession of the property; nevertheless, the time period will vary on the lender, and who is in the property. 
        It is important to realize that hiring an Experienced Chicago Bankruptcy Attorney prior to the sheriff sale is necessary to save your home from foreclosure.  Once the sheriff sale happens it is too late.  We often hear from potential clients who are too late to save the property and call after the sheriff sale.  As long as the person is proactive and calls the foreclosure attorneys for updates then they will know where the mortgage company is in the foreclosure process.   We can save your home from foreclosure or you can wipe away the debt with a Chapter 7.   If you have any questions please call our office at 312-666-7882.

Marc Wagman

And more people are filing for Chapter 7 Chapter 7 bankruptcy, which liquidates assets to pay off some debts and absolves the filers of others. That is significant because a 2005 overhaul of federal bankruptcy laws aimed to encourage Chapter 13 filingsLearn More on Chapter 13, which force consumers to sign onto debt-repayment plans in exchange for keeping certain assets.

The changes were designed to make it more difficult for people to shed their debt, particularly in a Chapter 7 filing. A "means" test, Learn More about the Means Test for example, was introduced to separate those who could afford to repay their debt from those who couldn't. A Chapter 7 filing is off the table if the means test determines a person is able to pay back at least a portion of the debt after it is restructured.

The worst U.S. recession in a generation is testing the effectiveness of these laws. The economic downturn also has prompted more middle-class Americans to file for bankruptcy protection

Overall, personal filings hit 1.41 million last year, up 32% from 2008, according to the National Bankruptcy Research Center, which compiles and analyzes bankruptcy data. It is the highest level of consumer-bankruptcy filings since 2005. Consumers rushed to file in 2005 before the new bankruptcy laws took effect in October of that year.

Chapter 7 filings were up more than 42% as of November 2009, compared with the same period a year earlier, according to the research center. November is the most recent month with analyzed data available. Chapter 13 filings rose by 12% and made up less than a third of 2009 filings as of November.

"That suggests it was largely ineffective," Ronald Mann, a law professor at Columbia University, said of the 2005 overhaul. "I don't think anybody who's knowledgeable about the bankruptcy system thought the statute was well crafted."See Our Website to Learn More Swanson & Wagman Website.