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As Chapter 20 bankruptcy rulings are rounding the circuit court system and gaining momentum, there is one instance where the application of lien stripping second or third property liens may be hitting a snag.

Recently, the U.S. Court of Appeals, Eleventh Circuit concluded that if a Chapter 13 bankruptcy case is filed within four years of a Chapter 7 bankruptcy case, the Chapter 13 would wipe out second and third junior mortgages as unsecured debt, eliminating the requirements of repayment via a Chapter 20 bankruptcy ruling.

This is welcomed news to those facing financial hardship and possible foreclosure of their homes due to upside down mortgages. Who is entitled to take advantage of this new bankruptcy option poses another issue, especially for married couples seeking financial relief.


Stressing over mounting debt and other financial issues could actually cause your intelligence level to drop. According to a combined study done by several top universities, worrying over money can reduce your IQ score by up to 13 points.

The study team was made up of researchers from Harvard, Princeton and the University of Warwick, located in Britain. They concluded that when people are spending so much time stressing about money, it uses up a good portion of what they refer to as “mental bandwidth” and that leaves little time to focus on anything else.

Researchers used two different groups for their study. The first group was shoppers at a New Jersey mall, made up of both low and middle class. The group was given a series of tests which measured impulse control and IQ. In order to trigger the stress process of the brain, before the testing, researchers had discussions with half of the group about how they would handle it if their vehicle broke down and the cost of the repairs were $1,500. That group performed much poorer on the tests than the other half of the group.


You fought the good fight, but it was not enough. Due to financial hardship your family home has gone into foreclosure status and you are now facing eviction in your home state of Illinois. Not only are you reeling from the emotional pain associated with losing your home but you are also regretting not contacting an experienced foreclosure attorney at the onset of your financial difficulties. Now you are left wondering what happens next.

For those currently in foreclosure, without any recourse, subject to Illinois Civil Procedure Law (735 ILCS 5), take comfort that you will not be immediately forced to vacate your home, but if you choose to dig in your heels as a last ditch effort, the bank or the new homeowners are permitted to pursue eviction action against you as follows:

Self-Help Eviction


Facing the loss of your family home to foreclosure was not part of your American dream. Every nook and cranny holds a cherished memory, but due to economic hardship you are unable to continue making your mortgage payments. You are quickly approaching the end of your 90 day grace period. There is no other recourse, the bank is planning to call in the loan. You are now facing foreclosure and can not wait for the nightmare to end, but for many unsuspecting homeowners it may continue to haunt them for another 20 years.

Perhaps impossible to comprehend, but true. A recent Wall Street Journal article chronicled the plight of Joseph Reilly, who recently lost his Florida vacation home as a result of the financial hardship due to long-term unemployment. Unable to pay his mortgage payments, the bank took ownership and sold the home. Mr. Reilly believed that would bring an end to his foreclosure nightmare, until the day the bank filed a deficiency judgement against him to the tune of $192,567.71. Mr. Reilly was now responsible for the deficit of the loan following the application of proceeds from the sale of the house.

Rarely do homeowners expect this following a foreclosure but it is becoming an increasingly reality for many. Banks are now opting to spend the necessary resources to decrease their risk factor by legally holding the original borrower accountable for the remaining balance of the original promissory note following a short sale.


If you're looking to get a mortgage through the Federal Housing Administration, there are several important factors to consider. FHA will review your credit history in order to determine what kind of a loan risk you are, but it is possible to get an FHA mortgage even if you have previously filed bankruptcy. Learn more about the stipulations attached to this guideline by talking to your bankruptcy attorney.

If you have filed Chapter 13 bankruptcy, you must have been making payments on your payment plan for at least one year. FHA does not guarantee approval of such an application, but they will consider it with the written approval of the court trustee. When the loan application is sent in, the borrower is responsible for providing a full explanation of the circumstances of his or her bankruptcy. As expected, the financial background of the individual is explored and it must be clear that the individual has good job stability. Finally, good credit must have been established by this borrower in order for the agency to consider starting a mortgage.

If you filed Chapter 7 bankruptcy, you must wait at least two years since the discharge date to apply for an FHA loan. Note that this refers to the discharge date rather than the bankruptcy filing date since these are actually two separate occasions, so verify that you have waited the full 24 months before submitting an application. As with any mortgage application, the FHA wants to see that an applicant has a stable job, has established good credit since the bankruptcy, and that he or she meets the financial qualifications of obtaining a loan.

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