Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
The father of the bank employee lost his job and so the bank employee was shouldering the mortgage. He is in a bank in Illinois, Chicago suburb. Because he has a car payment going on, the bank is not willing to clear the whole amount under short sale. So if the only option is to tell the bank that they can either accept the short sale in full settlement of both the mortgage and equity, or you can go for foreclosure. In the event the loan balance comes on the bank employee, he is suggested by several friends to go for bankruptcy. But some say, as a bank employee, one cannot opt for bankruptcy or foreclosure. Please advice.
Hi again. Thanks for the additional information.
First, the bank employee is not liable for his father’s debts unless the bank employee personally guaranteed the loan (i.e. co-signed). Second, a consumer does not opt for foreclosure. Foreclosure is the lender’s remedy if the loan is not paid. Therefore, it’s all up to the lender, but the lender will certainly want to foreclose if it’s not getting paid since that’s the only way it can forcefully sell the property to recoup its money. Last, the bank employee can file for bankruptcy if he wants to … there’s nothing in the law that would prevent that.
Therefore, if the bank employee did co-sign the loan, and the lender forecloses and wants to go after the bank employee for a deficiency, then a bankruptcy may be the best course of action. I will point out, however, that some employers don’t like to hire employees who file for bankruptcy because it shows that they may be irresponsible with money … and that could be important to a bank.
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Yes, the bank employee is a co signer. The father lost his job a year ago. The bank employee is victim to situations. He is a responsible person and in that circumstances, Please give me a final say.
1. The bank employee is beyond his means to pay the mortgage
2. Whether foreclosure and bankruptcy will effect his employment.
Just awaiting final answer.
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