It is undisputed that trial courts have broad discretion in approving or disapproving a mortgage foreclosure sale. The second part will address several of the common roadblocks thrown up by courts in denying such judgments, and will suggest the legal arguments that should be made to overcome these roadblocks. The first part of this article will discuss the legal standard for entry of a deficiency judgment. On one occasion, the only reason given to this author was that “we don’t do that in this county.” Assuming that the statutory requirements are met by the lender, however, the IMFL does not give the court the discretion to refuse to enter deficiency judgments. In today’s economic climate, however, courts are becoming increasingly reluctant to entering such personal judgments, most often on the grounds of fairness and equity. Although obtaining a personal judgment may often be a pyrrhic victory, it is an option for collection that should often be pursued by foreclosure counsel. If your creditor cannot account for valuable articles left in your car, you may be entitled to compensation or payment for the value of those lost items.The Illinois Mortgage Foreclosure Law, 735 ILCS 5/15-101, et.seq., (“IMFL”) allows for entry of a personal deficiency judgment against a borrower when the lender does not receive all amounts due it from the foreclosure sale of the property. To reclaim your personal property, you may be required to pay reasonably incurred expenses for inventory and storage of the items. However, the recovery agent may dispose of the personal property after giving you written notice and instructions on how to retrieve your items. Recovery agents are individuals hired to be complete an inventory of the personal property found inside the vehicle. A lender who repossesses the car may be entitled to keep those. ![]() These items do not include most improvements you may have made to the car, such as a stereo system or luggage rack. A creditor may not keep or sell any personal property found inside the vehicle, no matter what the creditor decides to do with the auto. Personal property is something you own that does not come with the vehicle and that can be removed from the vehicle, like a backpack, a laptop, or other personal items. If this happens to you, you will have to pay back the lender even after the collateral is no longer in your possession. The lender can sue you in court to obtain a judgment against you, which is called a deficiency judgment. For a mortgage, your collateral is the house and property that you own because of the loan/mortgage.Īfter you sell your collateral to help pay off your loan, any amount you still owe is called a deficiency. ![]() ![]() If you fail to pay back the loan, the lender has the right to take possession of your collateral, such as your home through mortgage foreclosure or your car through repossession. Collateral is an asset that can be sold if you are not able to send the lender your loan payments. Collateral can also be property or another asset you offer a lender in exchange for the promise to pay the loan. Once you get a loan, you now have what’s known as “collateral”, which is the home or the car you just bought. Automobile loans and home mortgages are the most common types of loans consumers get from lenders (banks/financial institutions).
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