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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2842
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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we recently bought a second home with plans to rent our first.

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we recently bought a second home with plans to rent our first. we had dual income and were able to cover both mortgages, but due to medical condition with our daughter i've had to stay home and we now only have 1 income. we only have enough cash to cover 2 months on the home we are not living in. we owe more on the house than its worth. if we end up getting foreclosed what are our options? would we be responsible to pay any difference in what the bank sold it for and we owed on it? if so, we couldn't. would we have to file bankruptcy? would we lose the home we live in? cars? all of our savings (its small)? would they garnish our wages?
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 7 years ago.
Generally in Illinois, the lenders do not come after you for a deficiency balance after foreclosure. However, this is not always true. If the lender forgives debt too, then you could be taxed on that amount. If you file bankruptcy, you can discharge the full amount and walk away from it. Normally, if your current home has less than 30,000 in equity, and there is not much equity in your vehicles and bank accounts, you should be able to qualify for chapter 7. You can protect up to 8000 in the bank and household items, and you have 2 -$2400 vehicle exemptions to protect your cars (as well as any of the $8000 left over)
Talk to a local Illinois bankruptcy attorney for a free consultation, most offer free consultations to review all of your options. I do!
The only other option you have, save for renting it out to cover expenses, or selling it, whereby you can work a short sale with the lender if the purchase price is close to what you owe.
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