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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2863
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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Im in the process of a divorce. Foreclosing on the house in

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I'm in the process of a divorce. Foreclosing on the house in Illinois. If I file bankruptcy chapter 11 (not 7) before the divorce how will that affect me? Should I file before or after the divorce. After the divorce I will be responsible for an amount of money for the foreclosed home that is way less than what we purchased it for.   Which is best for me, filing before or after the divorce.
HiCustomer
Chapter 11 is normally for businesses, so I assume you are filing for Chapter 13, although my answer is the same either way. In most cases, I recommend that a debtor file bankruptcy before the divorce, that way,the debts are discharged and don't need to be distributed in the case. Preferrably, I recommend both spouses file if there is joint debt. The issue revolves around joint debts. Each party is responsible for the joint debts, regardless of what the other spouse does. So, if you file bankruptcy, (11 or 13) your plan will say what percentage of the debts are paid back. Your plan can choose to pay 100% of the cosigned debts, or just a percentage. Any portion that doesn't get paid is your spouse's responsiblity for those joint debts. Once you throw the divorce into the mix,then the divorce decree will control as well. Whatever your liability is, will remain yours, even when filing bankruptcy. So, if the home was joint, and there is a deficiency balance (often they do not pursue the deficiency in IL) you are responsible for that percentage, even if you discharged it in bankruptcy. Let's say there is a deficiency after you file the bankruptcy, and they go after your ex for the funds. If your divorce decree says you are to pay a percentage, you would still have to, or else your ex can bring you back into divorce court for failure to comply with the divorce order. If you are saving the home thru the chapter 13, then there will be no deficiency if your plan is to cure any arrears. You are still on the hook down the line if you ever default, but the 13 can help bring the loan current again. Talk with your divorce lawyer and have them work with your bankruptcy lawyer so the cases can be drawn up to protect you the best they can with your goals in mind. Good Luck.
Customer: replied 7 years ago.

Can you explain this sentence....

So, if the home was joint, and there is a deficiency balance (often they do not pursue the deficiency in IL) you are responsible for that percentage, even if you discharged it in bankruptcy.

 

What do you mean "Often they do not pursue the deficiency in IL"?

 

Thanks,

Bea

When a home forecloses, there is a good chance the court will not allow the lender to collect on a deficiency balance if it sells for less than is owed on the case. You can hire a lawyer to make sure of that in the foreclosure case.
Customer: replied 7 years ago.

Do you have an attorney to recommend in the Pembroke Pines, Florida area?

Or can I hire you?

 

Thanks

Bea

Unfortunately I practice in IL. You can look up your local bar association on Google and they can refer you, or you can try the better business bureau as well. Good luck.
Terry L. and other Bankruptcy Law Specialists are ready to help you
Customer: replied 7 years ago.

Thank you for the information. I will look for a bankruptcy attorney here in FL before the divorce.

 

Bea

I wish you luck.
Thank you.